Speaking at a media luncheon yesterday, BIS Shrapnel chief economist and director – economics and property Frank Gelber said mortgage lending rates would hit 9.5 per cent by the end of 2013.

“We were lambasted a couple of years ago when we said rates would hit 10 per cent because nobody ever thought they would get that high again. While they never got to 10 per cent, they did surpass 9 per cent pretty quickly,” he said.

According to Mr Gelber, mortgage lending rates will once again surpass 9 per cent as Australia continues to recover post the Global Financial Crisis.

Mr Gelber’s comments were largely echoed by AMP’s chief economist Shane Oliver, who indicated that the standard mortgage lending rate could tip 8.5 per cent in just one year.

“I think the RBA were right to signal further rate increases and I expect the official cash rate to hit 5.5 per cent before December 2011, which would take the standard mortgage rate to approximately 8.5 per cent,” Mr Oliver told First Property Buyer.