KPMG’s economics team recently estimated that more than 800,000 fixed-interest mortgages that were taken out in recent years will transition to variable rate loans in 2023. Accordingly, a household with a $600,000 mortgage will face a $16,500 increase in their annual repayments when switched from a fixed-rate loan to variable rates. “Banks financed around 1.2 million new home loans between January 2020 and October 2021 based on ABS data, when fixed rates were falling and stayed low”, of which around 40% were fixed rate loans. The below CoreLogic chart illustrates the fixed rate “mortgage cliff” bearing down on Australia:“The pain will be felt most acutely from April 2023”, notes Owen. If you are looking to save thousands of dollars in mortgage repayments, try the Compare n Save mortgage comparison tool.

Source: The Guardian February 26, 2023 22:21 UTC