An unexpected drop in confidence saw consumer expectations for variable mortgage rates jump 12.8 per cent in July. According to the Westpac-Melbourne Institute’s Mortgage Rate Expectations Index, this is “the steepest monthly rise since we began running this question in every survey at the start of 2022.”

The historical average figure of the index is 143.8. In the last three months, however, there has been a 30 per cent surge, with a below-average read of 122.8 in April to 159.2 in July.

What is being dubbed a “sudden hawkish turn” is reportedly the most abrupt change seen in the last seven years. Currently, just under 60 per cent of consumers are expecting a mortgage rate rise over the next year.

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