- RBA announced its fourth consecutive cash rate hike in August
- Of those who have seen repayments rise, over a quarter had their rates rise above 6%
- Savvy’s survey investigated the impact of interest rate rises on mortgage holders
The Reserve Bank of Australia’s (RBA) efforts to combat inflation are taking hold with 77% of Australian mortgage holders having seen repayments rise according to a newly released survey conducted by Savvy.
The RBA announced its fourth consecutive cash rate hike in August, increasing it from 1.35% to 1.85%.
Of those who have seen repayments rise, 25.7% had their rates rise by over 6% turning up the heat on those already feeling the pinch of inflation impacting the cost of living.
For 18.1% of mortgage holders, repayments increased between 6 -10%, while 6.26% have dealt with rises between 11%-20%. Another 1.34% have reported increases in excess of 21%.
Savvy CEO and economics spokesperson Bill Tsouvalas explains that the survey results presented show economics in action.
“A rise in interest rates means a corresponding downward trend in overall spending.”
Bill Tsouvalas, Savvy CEO
“But that is of little comfort to Australians already doing it tough and set to do it tougher as the RBA puts the brakes on a little more each month,” Mr Tsouvalas said.
Adding fuel to the flames, income growth has proven relatively stagnant. Thirty-four per cent of all Australians surveyed said their pay had not changed since 2021. Just over one in four (26%) reported a pay rise of between 0-5%, and 7% said it’s gone up between 6-10%.
Mr Tsouvalas believes mortgage holders should consider trying to fix their current home loan rate now.
“Only 26% of mortgage holders in our survey said they’d try and fix their current home loan rate. This should be 100%,” Mr Tsouvalas said.
“If you are on a mortgage, the time to lock in a fixed rate or consider refinancing is now.”
“The time to lock in a low fixed rate is now. Don’t put it off. This should be your first priority.”
The Savvy survey found that 32% of homeowners report they would rely on savings to fund the increase; the same proportion would try to increase their income.
