Many experts are forecasting another supersized 50 basis point hike, although a smaller 25 basis point lift has not been ruled out.

The Reserve Bank of Australia has indicated it is getting closer to a “neutral” rate, which is where monetary policy is neither stimulatory nor contractionary.

The RBA board will meet on Tuesday afternoon ahead of its October cash rate decision.

Rising interest rates are widening the gap between what is paid by new and existing home loan customers, according to RateCity data.

Banks tend to offer lower introductory home loan rates to attract new business and leave existing customers on less competitive rates.

The average introductory variable home loan rate at one of the big four banks is now 0.26 percentage points lower than the lowest rate offered six months ago.

“New customer discounts have picked up steam since the RBA cash rate hikes started,” RateCity research director Sally Tindall said.

“Refinancing is booming as people seek out lower rates and that’s forced the banks to put better rates on the table.”

Rising interest rates have also dampened property prices, with the average dwelling price falling 1.4 per cent in September, according to CoreLogic data.

AMP Capital economist Shane Oliver said further falls were likely.

“The rapidity of the decline in home prices this time around likely reflects the de facto tightening that started with rising fixed mortgage rates a year ago, the speed of RBA cash rate hikes and heightened household sensitivity to rising interest rates flowing from much higher debt levels now,” he said.

The RBA started lifting interest rates from record low levels in May.

Today’s decision will be delivered at 2pm ACDT.

-AAP