When will interest rates rise and how high will they go?

It’s the key question for several million mortgage borrowers — when will the Reserve Bank start raising interest rates and how high will they go?

Unfortunately, there’s no clear answer. It was only months ago that the Reserve Bank was still hinting that rates probably wouldn’t rise until 2024.

That’s long since been blown out of the water, and now it’s considered a near certainty that rates will rise this year, the only doubt being exactly when.

This week’s RBA meeting has offered some further hints, and has caused a lot of experts to bring forward their forecasts for the first rate rise, with a growing consensus forming around June, although some still see August as a more likely lift-off date.

So, what should you be watching for as a sign the Reserve Bank is about to move, and how high will rates go when it does?

A woman with an umbrella open walks past the Reserve Bank of Australia's head office in Martin Place, Sydney.
Economists now generally expect the RBA board to start raising rates in June, or by August at the latest.(ABC News: John Gunn)

What changed this week?

Before the RBA meeting on Tuesday, the bank had repeatedly said in its public statements that it was “prepared to be patient” before lifting its official interest rates.

That phrase was conspicuously absent this week.

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