Homeowners to pay $50/month more

The average homeowner with a $300,000 mortgage will pay about $50 more after the Reserve Bank of Australia raised interest rates yesterday by 0.25 per cent, assuming the rate rise is passed straight through to borrowers.

Property industry analysts said the rate rise could dent house prices. Sydney real estate prices are up 8.6 per cent this year. Melbourne's have risen 11.6 per cent.

Economists expressed surprise that the RBA didn’t wait for further evidence of economic recovery.