The futures market is predicting a 5% RBA cash rate at the end of the year which is 1.25 percentage points higher than it is now.
Cash rate is currently at 3.75 per cent after three increases of a quarter of a percentage point in October, November and December in 2009.
When cash rate increases to 5%, we can expect the home loan rate will at least increase to 7.25%, but it is also possible to 8.00%.
Just want to remind all the invest: Don’t forget to put at least a 1.5% interest buffer when you buy your investment property otherwise you might not be able to afford your investment property at year end of 2010.