The rise from 3.25 per cent means average home buyers here will pay about $30 a month extra.

Payments on an average $200,000 mortgage will increase by $30.80 a month, based on a 25-year loan and a new home lending rate of 6.3 per cent.

The rate rise was widely predicted and follows the RBA’s decision to raise rates by the same amount last month.

For the Hill family of Strathdale, an extra $25 a month on their loan repayments will mean a lack of spare cash.

“We aren’t going to be able to keep the car maintained like you should,” Andrew Hill said yesterday.

“It is going to be a struggle to keep both our cars on the road.”

His wife Maryanne said that when they moved into their home two years ago they were stung by a series of rate rises, pushing up repayments by $100 a month.

“When they push it up by 0.25 per cent, I’m just waiting for the rest of them, which is very worrying,” she said.

Ms Hill said they were fortunate to both have full-time jobs, which allowed them to support their children, Chloe, 7, and Ruby, 3.

However, the increase could mean Chloe missing out on some extras.

“Things like extra savings and putting away for a family holiday next year or reducing the quality of holiday is going to happen,” Mrs Hill said.

“And Chloe is in grade 1 now. To keep her participating in events and activities will be hard.

“Every year it costs us $1200 for swimming, which is huge, but it is important, so it means we have to make sacrifices elsewhere.”

The rate increase will also affect real estate in Bendigo, the Real Estate Institute of Victoria Bendigo division chairman Noel Dyett said.

“For those already in the market, it increases the cost, so it is obviously something we are not all that excited to see . . . it is certainly not going to encourage people to get into the market,” he said.

Mr Dyett said he expected there would be an effect on Bendigo’s position as an attractive place for first-home buyers.