The views of a former Reserve Bank board member on the interest rate outlook might have been dismissed as "extreme" and "nonsense", but they sent a shiver down the spine of borrowers.
Economist John Edwards, who ended his five-year term as a board member last year, believes official interest rates could rise eight times over the next two years, based on the central bank's present economic forecasts.
That would add hundreds of dollars to monthly mortgage payments.
But the boss of one of the big four banks disagrees with the Edwards assessement.
ANZ chief executive Shayne Elliott said it was difficult to see interest rate increases anytime soon when Australia was struggling with below-trend economic growth and wage growth that was almost non-existent.
"I think it is hard to lay a case that says 'gee we are going to see significant interests rate rises'," he told ABC radio on Thursday.
Many households wouldn't be able to afford such increases.
"I think we need to be very careful."
John Kolenda, managing director of mortgage broker 1300HomeLoan, said a rapid rise in interest rates would be disastrous to already fragile consumer confidence.
"The impact of a number of rate rises by the RBA will just terrify consumers and prompt them to tighten their belts dramatically," he said.
It is a point made by the global central banking authority, the Bank for International Settlements, in a report this week, which cited Australia among a handful of other countries where household debt is on the rise.
"Increases in interest rates beyond what is currently priced in markets could weaken consumption considerably," the central bank to central banks said.
If Dr Edwards, a former adviser to Paul Keating, is correct it would take the Reserve Bank's cash rate to 3.5 per cent from a record low 1.5 per cent, where it has stood since August last year.
But financial markets are predicting just a single quarter of a percentage point increase by the end of 2018.
Deloitte Access Economics economist Chris Richardson also expects higher interest rates, but not to the same extent as Dr Edwards.
"We wouldn't see interest rates in Australia rise at all until sometime in 2018, probably a year from now, and by the end of 2018 you might have seen two interest rate rises," he told ABC radio.
The Reserve Bank will hold its monthly board meeting on Tuesday next week.
