Staggering amount of Aussies may be forced to sell homes if RBA hikes rates next month

Hundreds of thousands of mortgage holders could be forced to sell their homes in a declining property market if the Reserve Bank hikes rates next month. Australian homeowners are already nearing breaking point and a potential interest rate increase in August is likely to be the death knell for those already struggling to keep up with repayments. Hundreds of thousands of owners could be forced to put their home on the market after the RBA’s meeting next month. A rise in interest rates next month could force nine per cent of all property owners – up to 290,000 households – to sell up, according to research from Finder. Another eight per cent admitted it would take just two more rate hikes to force their hand. Personal finance specialist Taylor Blackburn said while most economists are forecasting a rate hold, the threat of an increase is weighing heavily on many people living paycheck-to-paycheck. “We’ve seen mortgage stress go up consecutively the last three months, with the price of petrol on the rise and inflation in general, there are a lot of people struggling,” Blackburn told Today. “About 40 per cent of people have less than $1000 in their checking account and are living pay to pay.” Blackburn advised struggling mortgage holders to not pull the trigger on selling too soon. He said research shows 40 per cent of Australians don’t even know what their current interest rate is. A hike to interest rates in August could force up to 290,000 households to sell up. Nine “So that means there might be a better deal,” he explained. “If you feel like you might be forced to sell, contact your lender first. “There’s hardship programs. You can pause your payments, you can go on interest only.” While Westpac is forecasting a rate increase of 25 basis points, NAB, CBA and ANZ expect the RBA to hold again at its meeting next month. However, the RBA’s decision is expected to be swayed by the upcoming inflation data, released on Wednesday. “A hold is most likely in a couple of weeks, that depends on the inflation data,” Blackburn added. “We’re more likely to see a hold than a cut.” Headline inflation sits at 4.0 per cent, well above the RBA’s 2-3 per cent target range.