Coming less than a month after the reserve bank’s last quarter percent rate rise, the likely jump in the cost of mortgage repayments may come as a shock to the many new home buyers drawn to the market by the federal government’s expanded first home buyers grant.

Homeowners have had a remarkable year for mortgage rates, with reserve bank interest rates sitting since April at half the level they held at this time last year.

However, accountant Denis Yeo said the rate was still lower than it had been at any point in the 30 years preceding the global economic crisis.

“For a lot of people in the community, the current borrowing rates are still the best that borrowers have ever seen,” Mr Yeo said.

He expected repayments on the average mortgage in Mudgee would probably be pushed up by about $50 - a total of about $100 when added to last month’s rate rise - which shouldn’t place too much pressure on anyone with a safe level of debt.

Mudgee Business Association president Bill Avery said he didn’t expect the rate rise would have much of an effect on local businesses, which have had it fairly good with current low rates and the Mudgee region’s secure economic position.

He said the rise was just an adjustment that was probably needed to keep inflation down, noting that skyrocketing inflation was the issue that could really affect small business.

Mr Yeo said it would also be positive for retirees and investors, whose dividends from their share portfolios would recently have been painfully low, and who would be relieved to see their investment returns growing.

However, Mr Yeo said the rate rise did raise one interesting political question.

If the economy has made enough of a recovery that a hike in interest rates is appropriate, why are government stimulus package funds still flowing?