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Australia’s biggest home lender fears borrowers in August could cope with their biggest monthly rate hike in nearly three decades if there is an inflation shock next week. Commonwealth Bank, along with four other major lenders, all expect the Reserve Bank of Australia next month to raise interest rates by 50 basis points, or 0.5 percentage points, to a six-year high of 1.85 percent. But CBA’s chief economist for Australia Gareth Aird said there was an outside chance of a 75 basis point hike on Aug. 2, bringing interest rates to a seven-year high of 2.1 percent from a three-year high of 1.35 percent. It would also be the steepest monthly increase since December 1994, meaning borrowers with an average mortgage of $600,000 would overcome another $256 increase in their monthly mortgage payments on top of the $352 increase they had experienced since May. Scroll down for audio Australia’s biggest home lender fears borrowers in August could cope with their biggest month...

Banking giant ANZ now expects borrowers to tackle four 50 basis point rate hikes in November – with the country’s major banks expecting cash rates to settle in 2023 once inflation is under control. The Big Four on Tuesday forecast the Reserve Bank of Australia’s cash rate would more than double from an existing three-year high of 1.35 percent to a 10-year high of 3.35 percent on Melbourne Cup Day. ANZ chief economist David Plank expects the RBA to raise interest rates by 0.5 percentage points in a row in August, September, October and November – and keep rates at that level throughout 2023 and 2024. “We think the RBA will take its cash rate target to a tight setting above three percent by the end of 2022, more than 12 months earlier than our previous estimate,” he said. A two percentage point increase in mortgage rates in November would leave borrowers with an average $600,000 mortgage owed $708 more a month in payments as the RBA cash rate hit its hi...