Housing commentators have warned that more rate rises are to come after the central bank increased the cash rate on Tuesday .

And if banks pass on the full rise, homeowners can expect to pay an extra $47 each month on an average $300,000 mortgage, they say.

The Reserve Bank of Australia (RBA) raised the cash rate by an expected quarter of a percentage point to 4.00 per cent, the highest since February 2009.

Mortgage Choice senior corporate affairs manager Kristy Sheppard said more rate rises were likely this year.

“Look at this increase as a taste of things to come for 2010,” Ms Sheppard said in a statement.

“Rates are expected to continue to rise in coming months, so make sure you’re ready for higher repayments unless you fix your interest rate at a premium,” she said.

The Housing Industry Association (HIA) said it recognised the need to return interest rates to “normal levels” during the economic recovery but cautioned against haste.

“Interest rate increases provide further bad news to first home buyers,” HIA senior economist Ben Phillips in a statement.

“The removal of the first home buyers boost and interest rate increases in the December quarter of 2009 saw a record drop in affordability,” he said.

Mr Phillips said that without further strong growth in residential construction during 2011 and 2010, the shortage of housing stocks would become more acute, delivering undue upwards pressure on rents and existing home values.

Mortgage broker Loan Market says the RBA should keep rates on hold for the foreseeable future.

“The RBA needs to keep official interest rates on hold for the foreseeable future to provide Australians with economic stability,” Loan Market said in a statement.

Loan Market executive chairman Sam White said the rise in the cash rate was no surprise and had been factored in by most mortgage holders.

“These rises have really put a lot of pressure on Australian families and we’ve seen that already start to influence how they’re looking at spending their money,” Mr White said.

Property information group RP Data says the decision by the RBA to raise the cash rate is not surprising.

“Most economic news has been quite positive during the last month,” RP Data said in a statement.

“Property values are continuing to increase, consumer and business confidence is strong and inflation is under control,” it said.

AAP