Finance guru's blunt advice amid interest rate hikes

Following today's announcement by the Reserve Bank of Australia that interest rates will rise to 0.85 per cent, one financial guru is encouraging Aussies to "get off your toosh" and look into refinancing.

The shocking rise by 50 basis points or half a percentage point was well above economist predictions and followed a rise back in May, of 25 basis points when the interest rate sat at an incredibly low 0.1 per cent.

Mark Bouris is the Executive Chairman of mortgage broking business Yellow Brick Road, which Nine is a shareholder of.

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He advises Aussies to, "get off your toosh and do something about it straight away" when it comes to looking at other financial options.

"You can't be sitting back, complaining about interest rate rises if you can save effectively four rate rises just by refinancing," Bouris, told A Current Affair.

According to Bouris, many Australian homeowners become complacent and fail to review their home loans regularly.

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"Americans refinance their loans every six months. They just don't stop. Australians are not lazy, but they get comfortable. I think Australians could save a fortune," he said.

"There's a huge swathe of Australians who never bother to check their interest rate. They don't know if they're paying too much and they never actually refinance, so at the end of the day they're paying way too much."

Today's announcement was unexpected for everyday Australians, as well as the experts.

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"I was quite shocked - a 50 basis points increase is the biggest increase from the Reserve Bank we've seen in 22 years, so this is a very big move from them," money expert at Finder.com.au, Sarah Megginson said.

According to data from Finder.com.au, the average variable rate has moved from 2.5 per cent to three per cent - meaning the monthly repayments on a $600,000 home loan, paid off over 30 years, will rise from $2370 to $2529.

Over the lifetime of the loan, that's an additional $57, 203 without taking into account future rate rises.

"It comes at a really tough time for people," Megginson said.

"We've had such a rush of bad news recently, we've had inflation rising, fuel prices going up, grocery prices are increasing, electricity prices are increasing and now we're having to deal with this big hike to our mortgage repayments."

However, economists have said the RBA has no choice but to raise interest rates as inflation remains high.

"High inflation means things are getting more expensive, so cost of living is getting squeezed," Senior Associate and Economist at the Grattan Institute, Joey Moloney said.

"The RBA needs to get that down and the way they get it down is to increase interest rates."

But there could be one silver-lining for buyers, with Moloney believing Aussies could see lower housing prices.

"Higher interest rates, yes that reduces your borrowing power, but it does that to everyone. So that should lead to lower prices," he said.