Australian mortgage arrears rise as rates hit 18-year high
The Commonwealth Bank said overdue home loans rose to 0. 80 % of its portfolio in the September quarter and profit held at A$2. 8 billion, after the Reserve Bank of Australia lifted the cash rate to 4. 85 %, its highest level in 18 years. The increase came amid broader pressure on borrowers following the central bank’s tightening cycle.
Earlier in the cycle, the rate hike prompted banks and economists to urge households to review expenses and consider refinancing. Mortgage broker John Maxwell advised homeowners to refinance to offset higher variable-loan costs. Economists noted that while the hikes raise mortgage payments, they also improve returns on savings accounts for many Australians and are viewed as the primary tool to curb persistent inflation, which has stayed near 3. 5 % while other major economies see lower rates.
