Personal Loans Australia :: News
SHARE

Share this news item!

Australian Borrowers Brace for More Interest Rate Challenges

Australian Borrowers Brace for More Interest Rate Challenges

Australian Borrowers Brace for More Interest Rate Challenges?w=400
According to recent estimates by CBA, the value of fixed-rate mortgages set to expire within the next six months amounts to a staggering $34 billion.
Even more concerning is the anticipated expiration of an additional $52 billion worth of fixed-rate mortgages by the end of the year.

The Changing Landscape of Fixed Rate Loans

It is noteworthy that Australian borrowers have only experienced a fraction of the 4.0% increase in the official cash rate (OCR) thus far. However, the CBA predicts that this number is poised to rise to approximately 85% by the end of the year, revealing a significant shift in borrowers converting their fixed-rate mortgages to variable.

This shift is said to unfold further in mid-2024 when the bulk of fixed-rate mortgages are set to be rolled-off. CBA estimates that Australian households will devote approximately 10% of their disposable income to servicing debt. This statistic marks a historic high in debt servicing costs for Australian residents.

Insights from an Economic Analyst

A recent tweet by Macquarie Group senior economist, Justin Fabo, captures the current state of affairs quite succinctly. He points out that despite the cash rate rising by 400 basis points, the average interest rate on outstanding variable-rate owner-occupier home loans has risen by a marginally lower 337 basis points (as of July).

A further analysis by Fabo indicates that the rise in interest rates for all outstanding home loans, on average, is around 278 basis points. This suggests that the average interest rates paid by Australian mortgage holders will continue to climb in parallel with the expiration of fixed-rate mortgages.

Rate Hike Speculations

Given the inherent tightening in the mortgage market due to the expiration of fixed-rate loans, it is highly probable that the Reserve Bank of Australia (RBA) will not increase rates again in this particular cycle. The upcoming challenges faced by Australian borrowers are indicators of an evolving mortgage landscape that will inevitably affect the decisions made by the RBA.

Published:Wednesday, 13th Sep 2023
Source: Paige Estritori

Share this news item:

Finance News

RBA to Continue Interest Rate Cuts Amid High Unemployment RBA to Continue Interest Rate Cuts Amid High Unemployment
08 Jul 2025: Paige Estritori

The Reserve Bank of Australia (RBA) is anticipated to maintain its trajectory of incremental interest rate reductions, according to insights from leading financial analysts at ANZ. Recent data from the ANZ-Indeed Australian Job Ads series revealed a rise from 114.8 in May to 116.9 in June, suggesting a potential rebound in job advertisements after previous declines. Despite a stable unemployment rate and hours-based underutilisation rate since mid-2024, the Australian labour market remains strained. - read more
RBA Poised for Cash Rate Cut Amid Inflationary Trends RBA Poised for Cash Rate Cut Amid Inflationary Trends
07 Jul 2025: Paige Estritori

As the Reserve Bank of Australia (RBA) prepares for its forthcoming monetary policy announcement, economic analysts anticipate a further reduction in the official cash rate by 25 basis points. This prediction, supported by Finder’s RBA Cash Rate Survey, reveals that 88% of participating experts foresee a cut that would lower the interest rate to 3.6%, aligning the decision with the recent decline in both headline and core inflation to the central bank's target range of two to three percent. - read more
Uncovering the Impact of Unsolicited Solar Sales on Consumers Uncovering the Impact of Unsolicited Solar Sales on Consumers
04 Jul 2025: Paige Estritori

In a concerning revelation, Australian retiree Christine Hirchfield shares her ordeal with an unsolicited solar installation that turned into a financial nightmare. Despite her initial enthusiasm for cheaper energy bills and a greener home, the project remains incomplete more than a year later. Consumer groups are now advocating for a nationwide prohibition on deceptive sales practices that target vulnerable consumers like Ms Hirchfield. - read more


Personal Loans Articles

Mastering Money Management: The Essentials of Personal Budgeting Mastering Money Management: The Essentials of Personal Budgeting
Embarking on a journey towards financial stability begins with the mastery of personal budgeting. It's the cornerstone of sound money management, where every dollar is allocated purposefully, paving the way for a future free from the shackles of financial stress. In this all-important first step, individuals learn the fine art of balancing their earnings with their expenditures, a fundamental skill for anyone looking to navigate their finances with confidence. - read more
Key Strategies for Smooth Loan Approval Key Strategies for Smooth Loan Approval
Pre-approval loans are a preliminary step in the loan approval process. They provide borrowers with a conditional commitment from a lender, indicating the maximum amount they are willing to lend, based on the borrower’s financial situation. - read more
Loan-Ready Budgeting: Prepare Your Finances for a Smooth Application Loan-Ready Budgeting: Prepare Your Finances for a Smooth Application
Stepping into the realm of loans and finance can be a daunting endeavor, but it all begins with a solid foundation in personal budgeting. Understanding how to manage your money effectively is not just a skill—it’s a crucial aspect of securing financial stability and achieving peace of mind. By tuning in to your finances and preparing a thought-out plan, you’re setting the stage for a well-informed loan application process. - read more
Decoding Loan Interest Rates: What You Need to Know Decoding Loan Interest Rates: What You Need to Know
Understanding interest rates is crucial when considering any loan. Interest rates determine how much you'll need to pay back over the life of a loan and can significantly affect the total cost. By gaining a solid grasp of how these rates work, you can make more informed decisions that could save you money in the long run. - read more
How to Refinance Your Loans Safely Without Credit Impacts How to Refinance Your Loans Safely Without Credit Impacts
In today's financial climate, many Australians find themselves exploring options to manage and optimise their financial commitments. One option gaining popularity is loan refinancing. But what exactly is loan refinancing, and how can it benefit you, especially without negatively impacting your credit score? - read more
Your Financial Comeback: Rebuilding Credit Scores for Future Opportunities Your Financial Comeback: Rebuilding Credit Scores for Future Opportunities
In the dynamic landscape of Australian finance, the emphasis on a robust credit score cannot be overstated. A favourable credit score serves as a gatekeeper to a world of financial opportunities, determining the ease with which individuals can access loans, the interest rates they will be eligible for, and even the prospects of securing a home in an ever-competitive market. As the average mortgage sizes surge to unparalleled heights, the significance of maintaining an advantageous credit profile escalates in tandem. - read more


Need Help Finding a Loan?
Find out now if you qualify and compare rates, offers and options from multiple lenders - without a credit check!
Loan Amount:
Postcode:
All finance quotes are provided free (via our secure server) and without obligation. We respect your privacy.

Knowledgebase
Mortgage:
A loan in which the borrower (the mortgagor) offers a property and land as security to the lender (the mortgagee) until the loan is repaid. Repayments of the loan are usually made on a monthly basis over a long period of time, typically 25 years.