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National News

Cost of living crisis ‘will get harder’ as mortgage, power pains collide

Millions of Australians are staring down the barrel of major mortgage stress as the cost of living crisis around the country worsens.

The rest of the major banks are expected to pass on the RBA's 0.5 per cent interest rate rise today, after Westpac already did so yesterday.

Households are being warned to expect the same rate rise next month, which would bring the cash rate to 1.35 per cent.

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The Reserve Bank is set to lift interest rates for the second time in as many months.

Monthly rises are set to continue until Christmas, when rates are tipped to peak at 2.5 per cent, meaning Australians will be paying an extra $716 a month on the average $600,000 mortgage.

The pain doesn't end there either, with fixed rates of many mortgages set to expire next year.

Treasurer Jim Chalmers yesterday acknowledged the rate rise would heap even more pressure on family budgets and add to cost of living stress.

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Power electricity bills powerlines energy

"This inflation challenge will get harder before it gets easier," he said.

The financial pain is not just hurting households, but also makes it more expensive for the government to pay down debt.

Soaring power prices continue to add to the pain for homeowners and renters as well.

Energy Minister Chris Bowen will today meet with state and territory counterparts to decide a response that could involve improving transparency around the gas market.

The ministers will consider giving new powers to regulators to monitor electricity and gas markets.

It comes amid a warning from peak bodies who say there will be intense and lasting pain for households and businesses if a solution isn't reached.

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