The RBA warns Australian homeowners to provide a “buffer” for mortgages.

Australian homeowners have issued a harsh warning from the Reserve Bank of Australia as more people take on dangerous levels of debt.

As more people take on dangerous levels of debt, the Reserve Bank of Australia (RBA) urges them to have a “buffer” of mortgages and warns national homeowners a chilling warning. It was issued.

According to official bank regulator data, nearly a quarter of new lenders owe banks at least six times as much as they earn. And the median home and unit price in Australia is now $ 698,170, Average income earner You will have a hard time paying off their loan.

Full-time workers with a salary of $ 90,329 and a mortgage of $ 558,536, even with a 20% deposit, have a debt-to-income ratio of 6.2, which is considered “dangerous” by the Australian Health Regulatory Authority (APRA). increase.

According to new data released on Tuesday, 23.8% of new borrowers in the three months to September 30th this year belong to this category, up from 16.3% 12 months ago and up 21.9% from the previous quarter. Did. Lower interest rates to keep up with soaring real estate prices.

RBA Put hold cash rate at 0.1%, the lowest ever – and We plan to do so until late 2023, and in some cases until 2024. – Governor Philip Row warned the borrower.

“It’s important that lending standards are maintained at historically low interest rates and that borrowers have the right buffer,” Dr. Rowe said.

“Australian people are taking on more and more stunning levels of debt compared to what they earn to enter the overheated real estate market,” said Sally Tindall, Research Director at RateCity. ..

“The record low interest rates have allowed Australians to borrow from more banks than ever before,” she said.

“But once interest rates start to rise, people who take on dangerous levels of debt can find it very difficult to balance their monthly budget.”

As debt to income increased, APRA data showed that the percentage of low deposit loans fell from 10.4% in September last year to 7.5% this year, in response to the decline in the percentage of first-time homebuyers. ..

Dr. Rowe said the real estate market seems to be a little cold, “the rate of increase is [in housing prices] It has been relaxed in the last few months. ”

“Mortgages have increased by 6.7% over the past year, but recently the value of mortgage commitments has fallen from high levels,” he said.

Initially published as follows RBA warns Australian homeowners a chilling warning

The RBA warns Australian homeowners to provide a “buffer” for mortgages.

Source link The RBA warns Australian homeowners to provide a “buffer” for mortgages.

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