Australian borrowers have been crippled by billions in monthly home loan repayments as they desperately await rate cuts.
Data from the Reserve Bank Housing Loan has found mortgage holders were charged about $14.5 billion in June 2024 – a staggering 66 per cent of which was just interest charges.
This amount has increased by $5.5 billion compared to home loan repayments in March 2022, when about $9 billion was charged.
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The figures were announced as Australians suffering mortgage stress await the Reserve Bank latest interest rate decision today, where it is expected the rate will remain untouched.
If the cash rate is kept steady, Australian mortgage holders will have paid 4.35 per cent for 12 months straight.
“It’s incredible to think Australian borrowers are having to shell out an extra $5.5 billion a month in mortgage repayments. What’s even more incredible is that most households are managing to make it work,” Sally Tindall, Canstar Data Insights Director, said.
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“Cash rate cuts will be music to borrowers’ ears but the RBA is unlikely to move any time soon.”
Tindall said the RBA’s ‘wait and see’ method is supported by the current unemployment and inflation rate.
The next rate decision is set to take place in early November 2024.
Forecasts for the big four banks’ rate cuts are down to 3.10 per cent for CBA in December, 3.35 per cent for Westpac by February 2025, 3.10 per cent for NAB in May 2025 and 3.60 per cent for ANC by February 2025.
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The first-rate cut could bring $92 per month in mortgage relief for a $600,000 loan and about $153 for borrowers on a $1 million mortgage, according to research from Canstar.
The $14.5 billion figure comes as no surprise as Australian mortgage holders reach breaking point.
Finder research in August revealed 40 per cent of borrowers put more than 30 per cent of their earnings towards home loans.
Thirty per cent is the widely accepted threshold for mortgage stress, Finder said.
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