Consumer spending has been a trending topic of discussion lately, and it’s no surprise that mortgage interest has taken centre stage as the main contributor of increased living costs in a recent report released by the Australian Bureau of Statistics (ABS). The data revealed that employed households experienced a significant 78.9%* increase in mortgage interest costs over the year. This was by far the largest contributor, followed by food and alcoholic beverages, and housing expenses at 7.9%.
This surge in mortgage interest can be attributed to increases in home loan interest rates and has directly affected homeowners’ disposable income and subsequently altered their consumer spending habits.
The data aligns with the cash rate rises implemented by the RBA over the past year, which has had a direct impact on homeowners and prospective property buyers, influencing the broader economy as a result. The RBA paused the cash rate hikes in April which provided temporary relief to homeowners and potential buyers, allowing more time to assess the impact of previous increases and evaluate the overall economic outlook. However, with the rate increase resuming in May, it is crucial to revisit the impact of mortgage rates on your household expenditure and adjust your financial plans accordingly.
Individuals who are coming off fixed rates will be particularly affected, with many facing a rate that is 3% higher than what they were on, resulting in skyrocketing repayments.
Get on the front foot.
Taking action might seem overwhelming and confusing, but procrastinating on this could prove to be very costly. By meeting with our team, you could save on your repayments and also benefit from a cash incentive that some lenders are offering for switching banks.
Our team of highly experienced mortgage brokers are here to help you navigate the process and manage it for you. We work with over 60 banks and lenders and have access to the most competitive offers for you.
Don’t put it off any longer. Book a consultation with one of our team today to get in control of your finances.
Source: ABS, Employee households All groups, annual movement (%), ordered by largest contributors to the All groups
Any information provided herein is of a general nature only. No consideration has been taken into your objectives, needs or financial situation. Before acting on this information you should consider if it is appropriate for your situation.