High interest rates are not bad news for everyone. Just ask savers, importers and Australians heading overseas

It is a universally acknowledged truth that interest-rate rises are always a bad thing for the average Australian household.

They are just a punitive form of economic medicine we have to take from time to time, on the say-so of the Reserve Bank of Australia - but nobody enjoys it. Except perhaps the sadistic central bankers.

And this is probably true for anybody with a mortgage. That might describe the majority of economic commentators, but it is not true of all Australians.

While higher interest rates are bad for borrowers, and therefore good for savers, there are in fact many ways higher interest rates directly help (a subset of) Australian households.

Higher cash rates means lower house prices

One of the most direct effects of the higher cash rate is its impact on households’ ability to finance the purchase of a new house. Whether you are a first home buyer, a repeat buyer or an investor, a higher interest rate will limit what you can borrow and therefore the amount you’re able to pay.

Accordingly, a higher cash rate leads to lower house prices. This is great news for young Australians yet to buy their first home.

Buying into the property market is especially hard in Australia these days, and lower housing prices is great news for these households who have up until now been locked out of owning a home.

A higher cash rate means they will pay more on their mortgage if they are successful. But the Reserve Bank’s calculations suggest that in the medium term home buyers are better off when higher rates lower house prices.

The higher the rate, the healthier the returns

Whether you are saving to buy a car, a house or just for retirement, a higher interest rate will mean you get more bang for your buck on your deposits at the bank. For anyone who has yet to take on a mortgage or has already paid theirs off, higher interest rates mean they will be better placed to build their savings.

Analysis of HILDA data by the Reserve Bank suggests these net-savers are less likely to own a home, less likely to be employed, and consume far less than their debt-ridden cousins.

While there is a lot of heterogeneity in the broad category of “savers”, we should welcome the extra income to young households who haven’t yet been fortunate enough to be burdened with a million-dollar mortgage.

While a lot of Australians invest their savings in the stock market either directly or indirectly via their superannuation funds, many retirees transfer their assets to less volatile forms of savings such as term deposits or cash savings. A higher interest rate greatly increases the return that retirees and pensioners receive on both these sources of savings.

Rate rises haven’t received nearly as much press as the increase in mortgage rates, but interest rates for savings accounts have also risen over the past year.

Higher interest rates are great for travellers

Whenever the Reserve Bank increases the cash rate, the dollar is directly affected. A higher interest rate means a stronger Australian dollar. This is a boon to anybody who wants to travel overseas.