RBA sees savings, jobs cushioning mortgage stress – MNI

Dhwani Mehta FXStreet

According to MNI, the Reserve Bank of Australia (RBA) believes that “accumulated savings, a tight jobs market and spending cuts will make higher interest rates manageable for most homeowners.”

This comes as AUD400 billion of fixed-rate mortgages mature in 2023 and home prices are set to add to eight straight months of declines.

Citing sources familiar with the RBA thinking, MNI noted: “The full impact of the cumulative 300bps of tightening since May will become evident over coming months as higher cash rates are passed through to variable-rate mortgages, but a particular focus is on borrowers who fixed rates at historic lows and will confront a significant increase in repayments as the bulk of pandemic-era fixed rate deals mature this year. Fixed-rate mortgages peaked at around 40% of all home loans in early 2022.”

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Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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