Interest rate rise: How much more Canberra home owners are likely to pay on their mortgage

The RBA handed down a 50 basis point increase on Tuesday, taking the official cash rate to 1.85 per cent.

Data provided to ACM from financial comparison website Canstar calculates how much mortgage repayments for the average Canberran will increase if the rate rise is passed on in full by their bank.

Based on the current median house price, those with current monthly repayment of $4114 are set for a $249 monthly increase.

Meanwhile the unit owners with a monthly repayment of $2458 will be forking out $149 extra each month.

The increase was widely expected following figures last week, which showed inflation soared to 6.1 per cent in the past 12 months, its highest level in more than two decades.

In his statement following the bank's decision, RBA governor Philip Lowe foreshadowed further increases to come.

"The board expects to take further steps in the process of normalising monetary conditions over the months ahead, but it is not on a pre-set path," he said.

ACM INTEREST RATE SPECIAL:

Canstar's analysis shows if the cash rate reaches 2.85 per cent this year, monthly repayments since April for a $500,000 loan over 30 years would skyrocket by $808 to reach $2912.

Home owners with a $1 million loan over 30 years would be paying an extra $1619, taking monthly repayments to $5,823.

The past three rate rises have already had an impact on housing values, with CoreLogic's most recent home value index revealing a 2 per cent fall in national property values in the three months to the end of July.

Canberra house values saw the sharpest decline in nearly three years.

CoreLogic research director Tim Lawless said Tuesday's rate rise paints a weaker picture for the property market.

"According to most bank forecasts, the cash rate could rise at least another 75 basis points before peaking," he said.

"With this in mind, the decline in housing values is expected to become steeper and geographically more widespread.

"As the cash rate finds a ceiling, that will probably be the cue for housing values to find a floor."

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