Dubbo borrowers said if the central bank jacked up rates next year they would have to cut other spending - but some wondered how much more they could find to slice.

They also told the Daily Liberal they did not have the option to boost their income by either working overtime or taking on a second job.

A rate rise of 1 per cent on an average $300,000 home loan would add $200 to a monthly repayment.

Australia experienced one of the strongest housing markets in the world during 2010, a report released by Canada’s Scotiabank showed.

Economist Adrienne Warren anticipated the Reserve Bank of Australia (RBA) would lift rates by an additional 75 basis points in 2011.

She was not alone - head of Asia-Pacific research at TD Securities Annette Beacher forecast four 25-basis-point rises throughout next year, News Limited media reported yesterday.

Former RBA staffer and now HSBC chief economist Paul Bloxham expected three 25 basis-point rises in the year.

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The RBA raised rates by 1 per cent in the past year - from 3.75 per cent in December 2009 to 4.75 per cent in November.

Yesterday that had Dubbo mortgage holders examining the extra money that was likely to go out, knowing that little extra was coming in.

Helen Davis said she worked to afford the internet and Austar - her “little luxuries” - but if she had to pay another per cent more on her home loan, she may have to kiss them goodbye.

“I’d have to cut back a lot,” she said.

“I don’t go out now.”

Fiona, who asked that her last name be withheld, already felt “stretched”.

Her partner had recently left his employment, so they were surviving on only one income.

“A 1 per cent increase in rates would have a severe impact on our loan, it would make our monthly repayments $100 more, if not more,” she said.

“We’d have to make cutbacks in the weekly budget - but it’s already been trimmed.

“It is a bit scary with house insurance and electricity going up, but your pay doesn’t.”

The thought of further rate increases had Sally Foy looking at a blander life to meet her repayments.

“We’ve already cut little luxuries, like buying clothes and takeaway,” she said. “I buy meat on special and you don’t go out to the movies, you cut out those nice treats.”

Their fixed rate had recently ended, but Ms Foy said they would consider going back on a fixed rate.

A 1 per cent rate rise would not make Jenny Goud’s family “desperate” but it would certainly make them uncomfortable.

The Goud family of two adults and four children pay their mortgage with a single income.

“We’re not going to be desperate but it will mean making different choices,” Ms Goud said.

“It would not cut into necessities but it won’t have to go too much higher before it will.”

Gilgandra mortgage holder Chris Chapman said that with three children, a 1 per cent jump would hurt, but like many

others who spoke to the Daily Liberal, he said neither he nor

his wife had an opportunity to supplement their income with more work.

Despite tightening the belt, he accepted a rate rise as “a fact of life”, just as Leasa Hutchins did.

“Over the life of a 25-year mortgage, they have their ups and downs - you have to plan for it,” she said.

Tracey Richards had chosen to get even rather than get mad at banks.

“I re-financed with a different lender to get a better interest rate,” she said.

Meanwhile property investor Brett Smith had some bad news for renters, saying that further rate rises would be passed on to his tenants.

“If my costs go up, the rent will go up,” he said.

He also predicted that investors would only offer shorter term leases of six months “to cope with the unstable market”.