Australian mortgage holders face decades of higher interest rates

Summarised from 2 outlets · Updated 20 Oct, 03:32 · Archive

Australian mortgage holders face decades of higher interest rates as the central bank fights persistent inflation.

Australian mortgage holders will face higher interest rates for decades to come, according to EQ Economics managing director Warren Hogan. He warns that after 30 years of falling rates, Australia is now entering a long upward trend. The Reserve Bank of Australia has lifted the cash rate four times by 100 basis points in 2026 to reach 4.60 per cent.

Hogan told News24 that interest rates would need to stay elevated for years to combat inflation. He suggested the cash rate could reach a normal cyclic high of 5 to 6 per cent, with cycles continuing to impact rates but the overall pattern now shifting upward rather than downward. He believes the RBA leadership has changed tactics from a watch-and-act approach to a more aggressive stance on rates.

This shift follows nearly five years of the central bank missing its 2 to 3 per cent inflation target. Money markets are currently pricing in only a 27 per cent chance of a rate hike in November when the RBA meets, suggesting some uncertainty about the immediate outlook.

Australian mortgage holders face decades of higher interest rates — Image: The West Australian

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How it is being reported

Australian mortgage holders face higher interest rates for decades amid stubborn inflation battleA leading economist warns of a double blow to mortgage holders, with a grim rates call in November just the start of a new era.The West Australian · 20 Oct, 03:17
Australian mortgage holders face higher interest rates for decades amid stubborn inflation battleA leading economist warns of a double blow to mortgage holders, with a grim rates call in November just the start of a new era.Perth Now · 20 Oct, 03:17

In this story: Warren Hogan · EQ Economics · Reserve Bank of Australia · Australia

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