Borrowers will be hoping for interest rate relief when the Reserve Bank makes a tight call between another cash rate boost or staying on hold.
The central bank's board, which is due to meet on Tuesday afternoon for the July decision, is nearing the end of its hiking cycle after lifting interest rates 12 times since May last year.
Number 13, if delivered, will take the official cash rate to 4.35 per cent.
The central bank has responded to high inflation with the only tool at its disposal, interest rates, to slow the economy and weigh down consumer prices.
The increases have been hard-felt by mortgage holders, especially those who borrowed to capacity during the most recent pandemic-fuelled housing boom.
Higher interest rates push up mortgage repayments on variable-rate loans, with another 25-basis-point hike to add $1211 to monthly payments on a standard $500,000 loan compared to before the hikes, according to RateCity.
Both markets and economists are unclear on the trajectory for interest rates, with 27 economists surveyed by Bloomberg almost evenly divided on the July decision.
A major slackening in the rate of headline inflation is playing into the case for a pause, with the monthly consumer price index falling from 6.8 per cent to 5.6 per cent in May.
But under the hood the outlook is less optimistic, with the weakening in inflation much less pronounced when big falls in fuel and travel costs are plucked out.
The RBA has also ingested fairly robust spending data since the last meeting, although a rush to snap up discounted goods in part explained a jump in retail sales.
There are also continuing signs of strength in the labour market.
But business surveys have pointed to sinking confidence and worsening conditions, which indicate a cooling economy and interest rates starting to bite.
Consumer confidence has also been deeply pessimistic and the weekly index by ANZ and Roy Morgan has revealed a further softening ahead of the interest rate decision.
The index inched 0.8 points lower to 74.1 last week.
Averaged over four weeks, confidence is at its lowest level in 30 years with the exception of the first month of the pandemic.
Mortgage holders are the least confident about their financial positions and the state of the economy, at six index points below the average of other survey participants.
Shadow treasurer Angus Taylor said households were already feeling a lot of pain with more to come as interest rate increases were passed on to mortgage holders in full.
He said the government had to make fighting inflation its top priority.
"They need to have a fiscal policy that's taking pressure off, not adding to the pressure," he told Sky News on Tuesday.
© AAP 2023