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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