First-home buyer ‘not very hopeful’ for mortgage rate approval as Reserve Bank lifts Official Cash Rate

A first-home buyer says he’s “not very hopeful” a bank will approve his mortgage after the Reserve Bank put the Official Cash Rate (OCR) up to 0.75 percent.

The banks took just minutes to lift their own rates, which will put the squeeze on households with large amounts of debt.

Kyle Welch has only just managed to scrape together a 20 percent deposit to buy his first home, but he’s still waiting on a bank to actually approve his mortgage.

“I’m not very hopeful, I’m holding out, just trying to do the best I can,” he says.

The hurdles for hopeful home buyers are getting even higher – most of the major banks have stopped accepting applications from anyone with less than a 20 percent deposit.

“Yeah, it’s not very fair,” Welch says.

The Reserve Bank lifted the OCR by 0.25 percent on Wednesday – the second increase in two months.

For the Reserve Bank, it was an attempt to let some air out of our over-inflated economy.

“You’re looking at a group here who is paid to stop inflation getting out of control and we are determined to ensure that does not happen,” says Reserve Bank governor Adrian Orr.