NAB warns Aussie mortgage holders loan repayments will jump by 32 per cent – with the average mortgage to increase by $721 a MONTH
- National Australia Bank tipping a big surge in variable mortgage rates by 2023
- Forecast variable mortgage rates rising by 2.25 percentage points in 18 months
Typical Australian borrowers could see their monthly mortgage repayments climb by a third or $721 during the next 18 months, a major bank predicts.
In January, Australia’s median property price stood at $718,146, following a 22.4 per cent annual increase which was the fastest pace in 32 years, CoreLogic data showed.
With a 20 per cent deposit factored in, a borrower paying off a typical Australian home would owe the bank $574,517.
Someone with this kind of mortgage, with a still-low 2.39 per cent variable rate, would now owe their bank $2,238 in repayments every month.
Typical Australian borrowers could see their monthly mortgage repayments climb by a third or $721 during the next 18 months, a major bank predicts (pictured is an auction at Strathfield in Sydney’s inner west)
But National Australia Bank is predicting a 2.25 percentage point increase in mortgage rates by September 2023.
Should variable rates rise to 4.64 per cent, monthly repayments on a mid-point priced Australian home would climb by $721 to $2,959, marking 32 per cent increase in just 18 months.
NAB economist Tapas Strickland said interest payments as a share of household income would rise to the highest level since September 2012.
Even with rates at low levels, an average, full-time earner on a $90,329 with a $574,517 loan would have a debt-to-income ratio of 6.4.
The Australian Prudential Regulation Authority considers six to be a dangerous level where a borrower would struggle to pay their mortgage and bills.
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