Mortgage holders will pay more for their home loan, after the Reserve Bank raised interest rates for the fifth month in a row.

As expected, the central bank increased the official interest rate by another 50 basis points, lifting the cash rate to 2.23 per cent.

Senior economist with AMP Capital, Diana Mousina, says there is a lag in hard data, when interest rates change to when people adjust their spending.

“Usually when we have changes in interest rates, the Reserve Bank might change rates up or down once or twice, and then they usually pause and see how the data plays out, or how the economy goes at absorbing these rate changes before making another move,” she explained on Brisbane Live.

“The risk here is that we have the most depressive rate hike cycle that we have seen since 1994, and the Reserve Bank is not giving itself enough time to watch how the economy is responding.”

Neil Breen questioned if the RBA has gone “too hard, too fast” after not increasing rates during the pandemic.

Press PLAY below to hear her explain more

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