Homeowners have had their fears confirmed with the Reserve Bank deciding to raise interest rates by a quarter of a per cent for the second time in three months. The RBA's new base rate is now 6 per cent, the highest level since February 2001, adding about $35 a month to the average home loan. In a statement, RBA governor Ian Macfarlane said economic activity was strong across Australia and inflation pressures had increased. The move takes the official cash rate to six per cent, the highest since early 2000. CommSec chief equities economist Craig James said although warranted, he hoped the rate rise was the last in the current cycle. ''(It's) very much as the market excepted, and really we hope this will be the last interest rate hike that we will see,'' he told Sky News. "Twenty-five basis points will clearly hurt families and will clearly slow down the economy.'' The rate rise means those on a $200,000 25-year variable mortgage will be paying about $33 a month more to service their debt. Those with a $100,000 15-year mortgage will fork out an extra $14 each month. Calculate your new repayments here. Further rise forecast More pain may be on the way with some analysts tipping a third rate rise before the end of 2006. Today's RBA rate rise was widely anticipated in money markets after higher-than-expected inflation figures for the June quarter. Other recent data, including a rise in private borrowing in June, indicated the RBA rise in May failed to slow an economy still riding a commodities boom. The rate increase is likely to prompt banks to lift the average standard variable home loan from about 7.57 per cent to 7.82 per cent within days. Concern about higher interest rates has contributed to a stall in the rally in Australian stock markets as investors worry about the impact of higher interest costs on corporate profits. While the share market has largely priced in the impact of today's rate rise, retail stocks and the banks may lead any declines. Source: theage.com.au, with AAP