RBA cash rate hike delivers five-figure blow to first home buyer budgets

First-home buyers have potentially suffered a five-figure hit to their borrowing power thanks to four interest rate rises since February, pushing the homeownership dream even further out of reach. The Reserve Bank of Australia (RBA) delivered yet another blow to aspiring buyers budgets today, lifting the official cash rate by another 25 basis points to 4.6 per cent – the highest since November 2011. “The three increases in the cash rate target since the beginning of the year have tightened financial conditions and the economy appears to be slowing,” the RBA Board said in a statement. “But inflation is still too high and the Board judged that, in light of recent developments, a further tightening in financial conditions is warranted to support a return of inflation to target in a reasonable period.” Australia now has the second highest cash rate in the world – behind Iceland. Eventus Financial mortgage broker and founder Alex Veljancevski said the cumulative effect of the four rate hikes could be substantial, even for buyers whose income, deposit and expenses have stayed the same. “Even if their income, expenses and deposit haven’t changed, the maximum amount a lender is prepared to...