MORTGAGE holders have been handed a reprieve after the Reserve Bank of Australia announced a pause on cash rate hikes after 10 months of consecutive rises.
The RBA announced its decision to leave the cash rate target unchanged at 3.60 per cent at its meeting on Tuesday.
The pause provides much-needed relief for home owners as the cash rate sits at its highest level in more than a decade since the first rate rise was announced in May last year.
Home owner Jade Sparkes, who purchased a two-bedroom apartment in Merewether in July, said the pause on rate hikes was welcome news for mortgage holders such as herself.
"I definitely feel a sense of relief," Ms Sparkes said.
When Ms Sparkes spoke to the Newcastle Herald in September last year, she anticipated that she would need to take on extra shifts at her nursing job if interest rates continued to rise.
At that time the cash rate stood at 2.35 per cent.
Ms Sparkes said she has increased her work hours to full-time to cover increased mortgage repayments and the rising cost of living expenses.
"If I didn't have the additional expenses to cover these rate rises, I probably wouldn't have gone full-time," she said.
"I have definitely been more aware of spending and I've been stricter with my budget."
Over the course of the consecutive rate hikes since she bought the property in July, Ms Sparkes said her monthly repayments have increased by around $600 each month.
"My repayments were $3,300 when I purchased my apartment last year and now I'm at almost $4,000 a month," she said.
"I was preparing myself for them to go up to that level and if they kept going up any further this month I was probably going to have to talk to my mortgage broker and see what she suggested I do."
The halt comes after the RBA revealed last month that it would consider pausing cash rate hikes at the April board meeting, depending on the latest economic data.
Some economic experts predicted the pause.
In this month's Finder RBA Cash Rate Survey, 42 experts and economists weighed in on future cash rate moves and for the first time since May 2022, more than a third of panellists believed the RBA would hold the cash rate.
"Homeowners deserve a break from the relentless increase in pressure, and can finally breathe a sigh of relief," said Graham Cooke, Finder's head of consumer research.
More than a third (36 per cent) of Aussie homeowners said they struggled to pay their mortgage in March, according to Finder's Consumer Sentiment Tracker.
The panel now forecast that the cash rate will peak on average at 4 per cent, with 70 per cent of those who weighed in saying it will peak between April and July this year.
If the cash rate were to peak at 4 per cent, that would mean $15,000 more in interest on the average home loan of $600,000.
Rising interest rates have come as the RBA attempts to tame inflation.
Inflation data released last week showed annual inflation growth eased to 6.8 per cent over the year to February, down from 7.4 per cent in January and 8.4 per cent in December.
This remains well above the RBA's target range of two to three per cent.
