The record share of income spent on mortgages is set to increase even further, leading borrowers to dip into their savings to cope with the cost of living.
The already-record share of income households are spending on mortgage repayments will increase even further, the Reserve Bank has warned, causing borrowers to dip into their savings to pay for the rising cost of living.
Dr Kent said on Wednesday that scheduled mortgage repayments had risen to almost 10 per cent of disposable income from 7 per cent since the RBA’s first cash rate increase in May 2022.“This is above estimates of the peak reached in 2008 when the cash rate was 7.25 per cent,” Dr Kent said. The share of fixed rate credit has already fallen substantially to 20 per cent of all home loans from 40 per cent in early 2022, Dr Kent said.
Households accumulated about $300 billion in additional savings during the pandemic, which has provided a cushion to borrowers dealing with rapidly rising interest rates.
Australia Latest News, Australia Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
How a $10 all-up on Think About It would have returned you nearly $113,000Joe Pride was surprised by how much a $10 all-up on Think About It’s last eight wins would have returned – but if he was in that situation, he’d let it ride on Saturday.
Read more »
Everest field locked with $10 million recruit Alcohol Free taking Yulong’s slot7NEWS brings you the latest local news from Australia and around the world. Stay up to date with all of the breaking sport, politics, entertainment, finance, weather and business headlines. Today's news, live updates & all the latest breaking stories from 7NEWS.
Read more »
Rates are working as retailers cut prices to woo shoppers: RBAReserve Bank assistant governor Christopher Kent has used a speech to argue there are growing signs the bank’s high interest rates are working.
Read more »
Rates are working as retailers cut prices to woo shoppers: RBAReserve Bank assistant governor Christopher Kent has used a speech to argue there are growing signs the bank’s high interest rates are working.
Read more »
Digital payment platforms face RBA control in new draftThe government will release draft legislation today, granting the RBA powers to regulate Apple Pay, Google Pay, and other digital payment services. This move will enable the RBA to monitor these services in the same way as credit card networks and traditional transactions. The bill aims to address risks posed by digital wallet providers, which are currently unregulated and have been labelled 'anti-competitive'. Google and Apple, however, argue that they do not provide payment services.
Read more »
RBA’s ASX report card cuts its grades on CHESS governanceThe RBA ordered ASX to “redouble its efforts” to improve risk management culture and flagged concerns about internal audit.
Read more »