Mortgage repayments for many borrowers could rise sharply by the end of the year as their fixed-interest home loans expire.
Subscribe now for unlimited access.
or signup to continue reading
Analysis by consumer advocacy group Finder found nearly $30 billion worth of fixed-rate mortgages will expire by the end of the year, with people's repayments likely to rise by more than $600 a month.
The analysis revealed that figure would rise to $158 billion worth of fixed-rate mortgages by the end of 2023.
On average, repayments would increase as much as $10,872 per year.
The findings come after the Reserve Bank increased the official cash rate by 50 basis points, to 2.35 per cent, earlier this week.
It's the fifth month in a row the central bank has hiked interest rates.
While many signed up to fixed-interest rates when the official cash rate hit a record low of 0.1 per cent, recent increases will push repayments up once their terms expire.
Finder's head of consumer research, Graham Cooke, said the end of low-interest fixed rates could force many borrowers into mortgage stress.
"This is a very significant spike in repayments that many will simply not be able to afford," he said.
"The fixed interest 'cliff' is a very scary prospect for a lot of borrowers."
RateCity research director Sally Tindall said mortgage holders could face a shock in coming months.
"When they roll off the rate, they could have triple the rates they had when they were on a fixed rate and see their monthly repayments surge by hundreds of dollars," she said.
"What they will find is an entirely different home loan market."
The Reserve Bank is expected to further increase interest rates in coming months in a bid to curb inflation.
Australian Associated Press
