RBA U-Turn on Interest Rates and Mortgage Impacts with Peta Tilse | ABC Radio Brisbane

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Finance contributor

Peta brings over 25 years’ financial service experience gained in funds management, and wealth management. As a top performing fund manager, Peta managed institutional cash and fixed income portfolios (in excess of $5b) for Suncorp Investments, and as an Executive Leader, led ASX listed Cromwell Property Group’s Retail Funds Management business. At Natgen, Peta provides our funds management business with further depth and leads the development of new Natgen investments for the
benefit of our Unitholders.

Steve has had a varied career at the ABC from researcher for 7.30 Report to producing Stateline, as well as ABC Radio news and presenting the Queensland Statewide Evenings radio program.

Steve’s love of Brisbane and passion for fighting the good fight ensures lively and informative conversation every morning on ABC Brisbane.

Episode Transcript

Michelle Bullock, the Governor of the Reserve Bank, said this yesterday.
I don’t think there are any straight cuts in the horizon for the foreseeable future.
Clearly the Reserve Bank is worried about inflation. Why is this? Peta Tilse.
Inflation is definitely sort of here to stay. Our monthly number, we’ve gone from quarterly measure now to a monthly measure.
And this is supposedly a bit more accurate with what’s going on.
The monthly measure for Australia was an annual change in the October numbers of 3.8%.
So that’s what they think has, you know, prices have risen by over a 12-month period.
But interestingly, if you look at the Brisbane data, and I’m looking at the Queensland Government’s website,
the annual change for Brisbane is 5.2%. So if you think you’re feeling it, you definitely are.
What does this mean for future interest rate movements? How does it look to you?
Yeah, that’s right. So essentially the market is now pricing in a 40% chance that we will get a rate rise at the February meeting. There’s definitely 50 basis points priced in, so half a percent, priced in for next year.
So if you are considering buying a house at the moment or getting a mortgage or changing your mortgage, what do you think? How does it look, Peta Tilse?
Well, the market’s kind of already priced it in, so I guess it’s what can you afford.
And at the end of the day, when banks are assessing your ability to repay, they are actually adding a few percent on to your actual, the rate they’re quoting you. So they are actually already stressing what they think you can pay, and that’s why sometimes you don’t get the home loan you want.
Whether people should lock in or not, look, it’s up to their personal situations. But
I was talking to someone the other day, and I said, you can always do the 50-50.
You can do like a, if it is something you’re a bit worried about and you’re comfortable with whatever that longer-term rate is, you can always lock in half of your debt at that rate and keep the rest on variable, just in case the market’s wrong at the moment.
Peta Tilse is head of funds management at NatGen.