MORTGAGE repayments are set to rise again following the Reserve Bank of Australia's latest cash rate hike on Tuesday.
The RBA's first meeting of the year delivered a rise of 25 basis points, taking the cash rate from 3.10 per cent to 3.35 per cent.
Figures compiled by comparison site Canstar show the change could add $105 to the monthly mortgage repayment in Newcastle and Lake Macquarie, assuming a 30-year loan on the median house price of $815,469 at an average variable rate of 2.98 per cent.
The increase marks the ninth consecutive rate hike since May 2022 after taking it down to a record low of 0.1 per cent in late 2020.
It is the fastest rate of increase since 1994 and the highest rate since 2012.
Cardiff-based first home buyers Madeleine Jordan and Liam Janczuk committed to buying a house in December last year despite concerns about rising interest rates.
After saving for a deposit for two years, Ms Jordan said they began looking at the property market in April 2022 - one month before the first cash rate hike was announced - and gained approval for a loan in November.
They went with a variable rate on advice from their broker.
Ms Jordan said they were prepared for further rate hikes.
"Our broker said 'Look, interest rates are going to rise. That's a given. Here is where your position is even if they do," Ms Jordan said.
"She gave us figures based on the worst-case scenario so that even if they are to rise, we will still be prepared and we can still afford it essentially, which was really reassuring for us."
Being prepared is the best advice with many of the major banks predicting that the latest rate rise won't be the last.
Westpac and ANZ are expecting three hikes in total in 2023.
Ms Jordan said the couple felt a "little nervous" in the lead-up to the predicted cash rate rise on Tuesday after already experiencing one increase to their mortgage.
"It's always nerve-racking when you get the advice that your expenses are going to go up," she said.
"Our repayments actually went up during our pre-approval so the rate that we signed on to went up before we made our first repayment.
"I think it was $20 a week or $70 a month give or take. That was manageable.
"We are a little nervous [about further rate hikes] but we have educated ourselves on what it means and we know that it means changing habits here and there to make sure we are prepared to pay an extra $20 or $30 a week.
"We keep a close eye on our budget. We cook a home rather than eating out and we are definitely keeping an eye on those little things that can add up."
The announcement was not unexpected, with the majority of economists and experts in the Finders RBA Cash Rate Survey stating that they believed the cash rate would rise for February.
"Underlying inflation surprised on the upside again in the December quarter and retail sales have remained solid so combined these are likely to tip the RBA over into another rate hike," said AMP chief economist Shane Oliver prior to the announcement.
Mr Oliver expects the rise to be quickly handed on to borrowers, stating that bank funding costs are rising beyond the rise in the cash rate and this is likely to be passed on.
The Reserve Bank's decision to lift interest rates is unlikely to surprise mortgage holders or flood the market with distressed listings, according to the LJ Hooker Group.
Agents have reported strong numbers inspecting homes over January, with a shortage of stock keeping sales constant over the summer.
LJ Hooker Group's Head of Research, Mathew Tiller, said there is still interest from buyers and opportunities for sellers in the current market.
"The motivation will be to get in low and buy before anything changes towards the second half of the year when inflation has come under control," said Mr Tiller.
"The good news for sellers is that listings are down for the start of the year which means there is not much competition out there between properties, and while prices are softening the pace of decline has slowed."
