One-Fifth in the Red: 1 in 20 Mortgage Holders Spending More Than They Earn

The Reserve Bank of Australia (RBA) has disclosed that around one in twenty families with mortgages are now spending more than they earn due to the interest rate rises it has imposed, with relief expected—at best—over a year away. Most mortgagors have experienced a 30 to 60 percent increase in their minimum payments since the first increase in the cash rate in May 2022. In its March 2024 Financial Stability Review, the RBA says that “pressures from high inflation and tight monetary policy continue to weigh on many households and businesses” but these have been alleviated to some extent by factors including “the resolution of supply chain disruptions, declines in energy prices, continued strength in labour markets, strong household balance sheets and solid corporate earnings.”...