The head of Australia’s peak body representing finance and mortgage brokers says the Reserve Bank of Australia (RBA) must take responsibility for the difficult situation facing many Australians.  

Peter White AM, managing director of the Finance Brokers Association of Australia (FBAA) said today’s expected rise is another huge blow and that, “there will be more rises to come.”

He said it was disappointing that the RBA was telling Australians that it had no intention of raising interest rates when all of the signs were there to suggest otherwise.

“The FBAA was warning of this in early 2021 when no one else was, and we were laughed at by commentators who were listening to the RBA,” Mr White said.

“To prove our point we commissioned a survey and went public with it in November, and for the first time people started to take notice.”

At that time Mr White said, “Many Australians are clearly on the brink and are sleepwalking into disaster, living in the false hope that rates will stay this low.”

In response to the question of how likely it was that rates would rise, Mr White said in 2021, “The only way is up. Rising inflation in New Zealand has just seen a rate rise there, and other nations including the UK and USA have raised rates or are talking about it. Australia is not exempt to international trends.”

He said the RBA should have acted 18 months ago.

“Their lack of action and lack of foresight has resulted in devastation for many Australian families.”

Following today’s expected rise, his advice to borrowers who don’t have significant surplus funds is to “think about spending a little less this Christmas and prepare for more rises.”

He warned those thinking about refinancing that lenders look at discretionary spending when they assess creditworthiness, and spending up over the festive season could work against some who try to refinance.

“Be aware that lenders will assess you not at the current rate, but at a rate approximately three per cent higher, as they take future rises into consideration.

“This means for many people to meet refinancing criteria, they must be able to meet repayments around five to seven per cent – and likely higher after today – above the rate at which they were approved when they took out their current mortgage. Depending on the amount of the loan, this can equate to more than $2,000 per month higher.”