ANZ on Tuesday forecast interest rates could rise by 50 basis points in August, September, October and November, leaving the cash rate at 3.35 percent.
That means the average Sydney mortgage holder could pay another $1,300 per month.
However, the ANZ prediction could be the bare minimum of rate hikes, with minutes from the last RBA meeting showing the board believes the cash rate is still well below where it should be.
“The level of interest rates was still too low for an economy with a tight labor market and facing a period of higher inflation,” the minutes say.
“Members agreed that further action would be needed to normalize monetary conditions in Australia in the coming months.”
RateCity.com.au research director Sally Tindall warned borrowers to prepare for significantly more rate pain.
“ANZ now believes the cash rate could hit 3.35 percent in November – that would be a 3.25 percentage point increase in the space of seven months,” he said.
“With central banks raising policy rates around the world, it’s hard to see the RBA doing anything less than a double hike in August.
“Many families are already under pressure with skyrocketing grocery and gas costs. Sharp increases in mortgage payments, on top of this, could push some into the red.”
The other big banks have made smaller predictions about where interest rates will end up by Christmas.
Commonwealth Bank, Westpac and NAB have forecast a cash rate of 2.60 percent for November.
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