{"id":245022,"date":"2025-10-27T22:32:14","date_gmt":"2025-10-27T22:32:14","guid":{"rendered":"https:\/\/www.newsbeep.com\/au\/245022\/"},"modified":"2025-10-27T22:32:14","modified_gmt":"2025-10-27T22:32:14","slug":"expert-warns-of-rbas-nuclear-option-for-mortgage-holders","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/au\/245022\/","title":{"rendered":"Expert warns of RBA’s ‘nuclear option’ for mortgage holders"},"content":{"rendered":"

This isn\u2019t a drill. Your mortgage is officially on a knife-edge, and Compare the Market\u2019s <\/a>Economic Director David Koch just laid out the terrifying truth. <\/p>\n

The Reserve Bank of Australia faces a monumental decision on Melbourne Cup Day, with a crucial inflation report on October 29 acting as the fuse. <\/p>\n

Koch warns of a \u201cnuclear option\u201d \u2013 another rate hike \u2013 if inflation stays too high, creating a 50\/50 chance that could either deliver relief or inflict serious financial pain. <\/p>\n

\u201cThe September quarter CPI figure, due out on October 29, is the one to watch,\u201d Mr Koch said.<\/p>\n

\u201cUnemployment is on the rise, which is a warning sign that the RBA may need to cut rates and get the economy moving again.<\/p>\n

\u201cBut if underlying inflation (that\u2019s the trimmed mean) comes in at 3 per cent or above, the Reserve Bank may have no choice but to raise rates. That is the nuclear option.<\/p>\n

\u201cAt this stage, they really could go either way.\u201d<\/p>\n

MORE NEWS<\/p>\n

Aus loan approvals skyrocket in property rush<\/a><\/p>\n

\u2018Rate cut inevitable\u2019: The red flags RBA can\u2019t ignore<\/a><\/p>\n

Hidden mortgage mistake costing Aussies thousands<\/a><\/p>\n

\"Supplied<\/p>\n

Source: Compare the Market<\/p>\n

The latest CPI release for August, released in September, showed headline inflation rose to 3 per cent. <\/p>\n

But according to Mr Koch, it\u2019s the quarterly inflation data that will paint a clearer picture around factors that influence inflation, including export demand and the general state of the global economy.<\/p>\n

\u201cWe\u2019ve had a couple of back-to-back monthly CPI data figures come in slightly higher than expected, which is why we saw a hold on rates last month,\u201d he said. <\/p>\n

\u201cThe RBA has to be so careful right now. It\u2019s a bit of a balancing act and all about keeping that inflation figure inside the target rate.\u201d<\/p>\n

Mr Koch pointed to recent comments from RBA Governor Michele Bullock, who has cautioned Australians not to assume inflation will continue to fall.<\/p>\n

\u201cShe\u2019s been uncertain for weeks. If we get a number like 3.2 per cent or 3.3 per cent, the RBA could increase rates to bring inflation back under control,\u201d he said.<\/p>\n

\u201cIt\u2019s 50\/50. If inflation comes in around 2.5 per cent, we could see a cut. But anything higher will make the RBA cautious and anything above 3% could trigger a hike.\u201d<\/p>\n

MORE NEWS: Major banks reveal shock new timeline for mortgage relief<\/a><\/p>\n

\"Supplied<\/p>\n

Compare the Market economic director David Koch. CTM Jono Searle<\/p>\n

Borrowers saw rates slashed in February, May and August this year, with interest rates cut by a quarter per cent each time.<\/p>\n

There are still two more RBA board meetings before the end of the year. <\/p>\n

If rates drop even one more time in 2025, it could have a significant impact on household budgets.<\/p>\n

Regardless of the RBA\u2019s decision, Mr Koch said many borrowers had the power to reduce interest on their mortgage by negotiating lower rates.<\/p>\n

\u201cSwitching could deliver better relief than a standard RBA rate cut because the difference between rates across lenders can be enormous,\u201d he said.<\/p>\n

\u201cThe average variable rate is about 5.75 per cent, but we have rates as low as 5.34 per cent. \u201cMeanwhile, there are two-year fixed rates around 4.75 per cent \u2013 that\u2019s equivalent to four RBA rate cuts. This could be a great option for borrowers who are willing to fix their rate.<\/p>\n

\u201cIf you can lock in a full percentage point difference for even six months, you could be ahead. Don\u2019t wait for the RBA. Take control of your own rate.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"This isn\u2019t a drill. Your mortgage is officially on a knife-edge, and Compare the Market\u2019s Economic Director David…\n","protected":false},"author":2,"featured_media":245023,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[64,63,99,164],"class_list":["post-245022","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-au","tag-australia","tag-business","tag-economy"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/245022","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=245022"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/245022\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/245023"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=245022"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=245022"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=245022"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}