While the latest inflation figure is alarming, it is not the figure the RBA watches, instead the central bank makes its move based on the “underlying inflation”, which is now at 3.7 per cent, above the preferred 2-3 per cent, which sparked economists to revise their predictions.

Australian digital lending and payments provider WLTH, has put their bets on a rate rise this month around 0.15 per cent.

National lending manager Chad Hoy Poy said he expects banks will pass on the increased cost of funds to their customers in the form of higher variable rates.

“This may scare some mortgage owners away from variable rates to the predictability of a fixed rate,” Mr Hoy Poy said.

“I believe the variable rate rises won’t be high enough to justify switching to fixed rates that start with a 4.”

Full Article: The Adviser