![Rathmines home owner Gina Taylor is paying an extra $1104 a month on her mortgage since the first cash rate hike was announced in May 2022. Picture supplied. Rathmines home owner Gina Taylor is paying an extra $1104 a month on her mortgage since the first cash rate hike was announced in May 2022. Picture supplied.](/images/transform/v1/crop/frm/170682627/00f20c28-ffea-4037-a48b-8313c37efade.jpg/r19_38_335_561_w1200_h678_fmax.jpg)
MORTGAGE holders struggling to cope with interest rate rises are set to be placed under further pressure after the Reserve Bank of Australia handed down another cash rate hike on Tuesday.
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The RBA lifted the cash rate for the 12th time since May 2022, taking it up a further 25 basis points to an 11-year high of 4.10 per cent.
Canstar modeling shows the average monthly mortgage repayment in Newcastle and Lake Macquarie will increase by $113, taking it up to $4464 each month under the changes.
This is assuming an 80 per cent variable loan of $672,269 on the region's median house price of $840,336.
Lake Macquarie homeowner Gina Taylor, of Rathmines, is among those struggling with higher mortgage repayments.
Since the RBA announced its first rate rise in May last year, Ms Taylor's mortgage repayments have increased by $1104 a month.
She said another rate rise would put added strain on her single-income household which is already finding it tough.
![Mortgage holders are set to feel further pressure after the Reserve Bank of Australia lifted the cash rate, taking it to an 11-year high of 4.10 per cent. Picture Marina Neil. Mortgage holders are set to feel further pressure after the Reserve Bank of Australia lifted the cash rate, taking it to an 11-year high of 4.10 per cent. Picture Marina Neil.](/images/transform/v1/crop/frm/170682627/a3de2875-d165-473f-b14c-f1acd8f19a06.jpg/r0_0_6000_4000_w1200_h678_fmax.jpg)
"It will put me under pressure, but keeping a roof over my children's heads is my number one priority," Ms Taylor said.
"I'm a single-income household and every time I hear on the news that the RBA is meeting again I feel sick.
"Twelve months ago I was able to live comfortably and was paying extra into my mortgage to try and get ahead.
"Now I'm only just making the minimum repayment."
In order to keep up with her mortgage repayments each month, Ms Taylor has requested extra hours at work and cut back on after-school activities for her two young children.
"We hardly ever eat out and the rise in the interest rates impacted any plans I had to celebrate my 40th, I just couldn't afford it," she said.
"I cancelled streaming services, I cut down my phone bill and I often relook at my budget.
"These days I'm living week to week. An invite to a dinner or a social event gives me anxiety as I can't really spare any money to go."
Economists were split on whether the RBA would lift rates for the 12th time in just over a year.
In this month's Finder RBA Cash Rate Survey, nearly half of the panel correctly predicted a cash rate rise in June, with the majority of those accurately forecasting the increase of 25 basis points.
Graham Cooke, head of consumer research at Finder, said the decision to lift interest rates came as a shock to some.
"The RBA continues to operate in the dark, as our panel of economists are split on the bank's intentions," Mr Cooke said.
More than two-thirds of the panellists believe the RBA will hold the cash rate in July while almost two in three predict the cash rate will begin to decrease between November 2023 and April 2024.
Mr Cooke said the easing of cost of living pressures couldn't come sooner.
"It will be a relief to homeowners and renters to hear that this peak rate period should not extend beyond the first quarter of 2024," he said.
The news of another rate hike comes as almost half of Australian mortgage holders say they have made changes to their home loan to cope with higher interest rates, according to new research from Canstar.
The survey found that of the 47 per cent who have made changes to their home loan, the top move made was to reduce their extra repayments.
This was closely followed by stopping their extra repayments (29 per cent), tapping into redraw or offset funds to help with repayments (26 per cent), refinancing to a lower rate loan (22 per cent) and extending their loan term (12 per cent).
Other changes included switching to interest-only repayments (10 per cent) and more drastic moves such as selling their home (7 per cent) or their investment property (4 per cent).
![Mathew Tiller, LJ Hooker Group's head of research, said the decision to increase interest rates is unlikely to impact property prices. Picture supplied. Mathew Tiller, LJ Hooker Group's head of research, said the decision to increase interest rates is unlikely to impact property prices. Picture supplied.](/images/transform/v1/crop/frm/170682627/c3b370bd-5706-4b61-aa8e-1df931e09c59.jpg/r0_0_2880_2251_w1200_h678_fmax.jpg)
The decision to increase interest rates is unlikely to impact property prices with a shortage of listings and high demand driving growth, according to LJ Hooker Group's head of research, Mathew Tiller.
Mr Tiller said strong population growth and tight employment markets have resulted in increased competition for homes adding buoyancy to the market.
"The RBA's focus at the moment is on reducing inflation and the latest data show it is coming down but remains sticky and is not falling as fast as anticipated," Mr Tiller said.
"Today's decision shouldn't lead to a flood of mortgagee repossessions hitting the market, but it is likely there will be homeowners looking to downsize their mortgage as a way of managing their household budget, so we are expecting listings to slowly rise.
"Property markets are more positive for homeowners who do decide to list with elevated auction clearance rates, rising prices and higher attendances at open homes all pointing to a stronger winter selling season. "