Australian homeowners paying billions more on their mortgage repayments than they were in 2022

Canstar analysis of Reserve Bank data shows borrowers were charged about $14.5 billion on their mortgage repayments in June this year, compared to $9.01 billion in March 2022 – a $5.52 billion (or 61%) rise.

It comes as the RBA is set to meet for its monthly cash rate meeting Tuesday, and if they decide to hold at 4.35%, it would mark 12 months of stagnation.

The Commonwealth Bank of Australia is the most bullish on a cash rate cut, predicting it will drop as soon as December 24, while NAB remains conservative, forecasting the first fall for May.

Canstar data insights director Sally Tindall said it was incredible to think Australian borrowers were shelling out an extra $5.5 billion a month in mortgage repayments – and most households were making it work.

“Cash rate cuts will be music to borrowers’ ears, but the RBA is unlikely to move any time soon,” she said.

“Underlying inflation is tracking in the right direction but the reality is, it’s still sitting firmly in the threes.

“With unemployment holding steady at 4.2%, the RBA has cover to continue its ‘wait-and-see’ strategy to get the job done, and properly.”

Rethink Investing founder Scott O’Neill said mortgage holders facing difficulties would not find relief in the near future, which could compel some to sell their homes.

“Most borrowers are managing to keep their mortgage payments on schedule,” Mr O’Neill said.

“However, recent data from the Australian Prudential Regulation Authority for the March quarter indicates that mortgage arrears are on the rise, though they remain low compared to pre-Covid levels.

“Currently, mortgage arrears — consisting of non-performing loans and borrowers who are 30-89 days late on payments — account for 1.6 per cent of home loans across all authorised deposit-taking Institutions,”

He added that this marked an increase from a recent low of 1% recorded in the September quarter of 2022, but it was still lower than 1.8% observed at the beginning of the pandemic in March 2020.