The RBA has either kept rates steady or cut them over the last few years, leaving them at a record low of 0.1%.
However, against the backdrop of rising inflation, on Tuesday the Reserve Bank increased the cash rate by 0.25% to 0.35%.
In turn, interest rates with the banks will also go up, having a significant impact on Australians with mortgages.
Based on Tuesday’s numbers, someone with a AU$500,000 (NZ$552,000) mortgage could be paying an extra AU$65 (NZ$72) per month.
According to the ABC, of the one million new home loans approved over the last two years, around 280,000 Australians have borrowed six or more times their income and/or have loan-to-value ratios of more than 90%.
Their repayments are expected to get more difficult to handle as the OCR change is passed on.
This could prove to be a blow for Scott Morrison’s re-election campaign, which has focused on a key argument that the Coalition is best placed to handle the economy.
Morrison has addressed the possibility of an interest rate rise earlier this week saying the decision “deals with what people pay on their mortgages, that's what I'm concerned about, it's not about what it means for politics”.
“I mean sometimes you guys (the media) always see things through a totally political lens. I don't and Australians don't," he said.
On Tuesday, Labor’s Anthony Albanese said he took issue with that perspective.
"The problem here is, the context of Scott Morrison saying two things: one, that, you know, nothing to do with politics, because that from him is just quite frankly just an extraordinary comment. And secondly, the fact that people are doing it really tough. Wages are going down, at the same time as inflation is going up. And interest rates, potentially, could rise as well."
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