Mortgage ‘cliff’ looming for home owners when fixed-rate loans end | rachelclun
People who bought property during the coronavirus pandemic on fixed-rate loans face a financial cliff next year when their terms expire, as experts predict their repayments could jump by around $900 a month, adding pressure to household budgets.
People who bought during the pandemic with large loans will face the biggest financial shock as interest rates rise.Those favourable interest-rate conditions drove fixed-rate mortgages as a proportion of new lending to a peak of 46 per cent in July 2020. Westpac predicts the cash rate, currently at 0.85 per cent, will peak at 2.35 per cent by February, while financial markets are tipping it could reach 3 per cent by the end of the year.
In April, the average mortgage was $611,000 nationally, according to data from the Australian Bureau of Statistics. In April 2012, the average loan was $350,000 and in 2004 it was $237,000.
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