After the 10th consecutive rate hike of 3.60% in March 2023, Reserve Bank of Australia Governor Philip Lowe warned mortgage payments will reach a record high within a few months.  While many Australians can withstand the impact of rising mortgage rates, it’s the population’s inequality in savings levels that will affect living standards. 

Currently, inflation is high at an annual rate of 7.8% with interest rate payments keeping in step and increasing quickly.  Since May 2022, average repayments on a $750,000 mortgage have increased by around $1,500 a month.  With these increases, its estimated mortgage payments will consume approximately 9.5% of a household’s disposable income and will greatly affect the cash flow of those with a variable rate home loan. 

Mortgage holders who can afford current interest rates are being unfairly prevented  from refinancing by APRA’s 3% mortgage assessment buffer which is creating ‘mortgage prisoners’.  They’re locked into their situation, unable to access a better deal as they don’t meet the inflated assessment rate.

It pays to be diligent and check if your rate is still competitive. We can review your rate and if it is not competitive, ask your bank or lender for a better deal. We regularly reduce clients rates by 0.5% to 1.2%. On a $600,000 mortgage that makes $400 per month difference.

If you would like to know if you are paying too much or believe you may end up a ‘mortgage prisoner’, contact us to review your mortgage or check using our Better Deal.