HOME owners are facing bigger mortgage repayments after the Reserve Bank Australia handed down its eleventh rate hike in 12 months at Tuesday's meeting.
The increase of 25 basis points lifts the cash rate to 3.85 per cent.
Canstar modeling shows the average mortgage in Newcastle and Lake Macquarie will increase by $109 a month, taking monthly repayments up to $4,274 under the changes.
This is assuming an 80 per cent variable loan of $660,257 on the region's median house price of $825,322.
News of another rise comes after the RBA handed home owners a reprieve in April when they held the cash rate steady after 10 months of consecutive hikes in an effort to tame rising inflation.
Inflation has eased to 7 per cent from its peak of 7.8 per cent in December.
Wallsend first-home buyers Luke and Rebecca Fuller said they were prepared for another rate hike on Tuesday.
The couple purchased their two-bedroom home in March with the expectation that further interest rate rises were on the horizon after the Reserve Bank Australia lifted the cash rate for the first time in more than a decade in May last year.
"We are playing it by ear," Mr Fuller said.
"We are new in the market, so we have budgeted for the worst.
"Today's announcement isn't too much of a concern for us personally, but if it did continue to go up again I think we would have to have a look at the budget and tighten things a little bit."
Mr Fuller said that while a lift in the cash rate wasn't ideal, the flow-on effect of rising interest rates had worked to their advantage to secure a property at a price within their budget.
"We have been looking to buy since about 2019 but with the prices so high over the last few years we knew that we were going to have to pay quite a large amount of money and more than what the house was actually worth during the boom," he said.
"We found that prices had definitely dropped a bit compared to when they went up during COVID, so we have been pretty patient and come into the market at a good time."
He said that getting into the market when interest rates sit at their highest level in more than a decade was not a deterrent.
"We weren't too worried about getting into the market while interest rates are going up. It was probably the opposite," he said.
"We felt that if we could afford it at this stage, and we have budgeted for more just in case there are other rate rises, then the future would be OK."
He said the biggest pressure on their finances was the rising cost of living.
"We are paying a bit more attention to the cost of living, with things like the price of groceries," Mr Fuller said.
In this month's Finder RBA Cash Rate Survey, 42 experts and economists weighed in on future cash rate moves and other issues relating to the state of the economy.
More than half of panellists correctly predicted a cash rate rise in May, with the majority of those accurately forecasting the increase of 25 basis points, bringing it to 3.85 per cent.
More than two-thirds of the panel now expect that the cash rate has peaked.
However, a quarter of respondents predict the cash rate will peak at 4 per cent or higher.
The panel also forecasts an average cash rate of 3.75 per cent by the end of the year, 3.25 per cent by the end of 2024, and 2.96 per cent by the end of 2025.
Graham Cooke, head of consumer research at Finder, said the news is a heavy blow for many.
"Australians with an average loan size of $586,000 will be forking out around $14,000 more per year compared to what they were paying this time last year," Mr Cooke said.
"The market consensus is that we are now at the peak of a frenzied, steep climb.
"The question yet to be answered is how well Aussie homeowners will be able to breathe in the thin air.
"If the RBA does ease the cash rate, it will likely do so gradually, with a watchful eye on inflation."
According to CoreLogic's national Home Value Index (HVI) report released on Monday, house price recorded growth of 0.1 per cent in the region last month.
Colliers Residential Newcastle selling agent Anthony Merlo believes the decision to lift interest rates won't stop momentum in the property market.
He said buyer sentiment had intensified in a variety of price brackets, particularly in the $850,000 to $1.1 million bracket, noting the recent sale of a property in Whitebridge that was listed with a guide of $865,000.
The listing attracted 48 enquiries in two days and eight offers before it was sold for $980,000.
"That bracket is very competitive as acceptance levels of where interest rates are currently and where they may be over the next six to 12 months have gained momentum,' Mr Merlo said.
"The initial shock of rate increases has somewhat normalised."
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