A record $20 billion in interest has been paid by borrowers on their mortgages, eating into the purchasing power of consumers.
A tenth of Australians’ take-home pay is now going mortgages, with almost $20 billion paid to cover home loan interest bills in the past three months alone as signs grow the cost is forcing consumers to cut spending.
It has driven the share of the nation’s household income, which includes renters and others without a mortgage, being used to pay off home loans to a record high of 9.9 per cent. Peter King, the chief executive of the nation’s second-largest lender, Westpac, said the number of customers behind on their repayments was starting to climb, while businesses were also reporting tougher trading conditions.“The cost of living and high interest rates remain a challenge for some customers, while many businesses are facing cost pressures and experiencing lower demand,” he said.
Separate data from the Department of Social Services shows a growing number of people on JobSeeker in a sign of the slowdown across the labour market. Dutton accused the government of trying to encourage more people to rent for life because homeowners were “worried about interest rates and economic management”.
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