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An AFR report in December 2022 sited that a whopping $360 billion dollars’ worth of mortgages are due to come off fixed rates in 2023.
Coupled with this, will be the expectance of further rate rises from the RBA in 2023. Meaning further pressures on homeowners with a drastic increase in interest rates expected in these circumstances.
Most fixed home-loans with the big four banks will come to an end between July and December 2023 – meaning homeowners in these circumstances should be looking to refinance.
“Looking outside the big-four, and reviewing offers at various lenders will be crucial in the refinance process to ensure clients in these circumstances will secure the best product for their circumstances” Synergy Business Finance Manager Brendan Philp said.
2022 ended with an official cash rate of 3.1%, after eight consecutive monthly increases from the RBA.
“RBA cash rate decisions will continue from next month, and from the RBA board minutes last year members noted the share of household income being spent on mortgage repayments would reach levels in 2023 not seen since 2010” Brendan added.
Australians may become reliant on their savings to cover the expected 65 per cent repayment rise once fixed terms ended in 2023.
Homeowners who nabbed a low interest fixed rate and borrowed $750,000 could face an additional $2,000 in repayments under the 65 per cent expected rise.
Chief economists sited that around $35 billion of fixed rate loans would roll off from April this year, $44 billion in May and around $30 to $40 billion over the rest of the year – adding up to $370 billion across 2023.
Discretionary spending is also expected to take a hit but many predicted the RBA would continue to raise rates in both February and March.
Refinancing can take time to ensure the best product for your circumstances – so the best time to look at what’s available with your broker is now!
With access to over 40 lenders, our mortgage finance team are available to discuss your requirements and how we can assist. Give us a call on 1300 324 588 or send us an enquiry on our website, here.
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