The Reserve Bank of Australia has lifted rates by 0.5 per cent.

The increase is much higher than expected, with rates jumping from 0.35% to 0.85%.

CommSec senior economist Ryan Felsman said the RBA would adopt a gradual approach to lifting the cash rate across its monthly meetings this year.

“For the 35 per cent of Australians that have a mortgage, this will be a challenging period,” he told Liam Bartlett on 6PR Mornings.

Shane Oliver, Chief economist at AMP spoke to Oliver Peterson on Perth Live to discuss what the increase will mean for you and how you can prepare.

Press PLAY to hear why Mr Oliver was unsuprised by the RBA’s announcement today