If your home loan feels heavier than it did a year ago, you are not imagining it. This has been one of the toughest stretches for Australian borrowers in decades, and the numbers back up the feeling.
Five rises, and counting
On 3 November the Reserve Bank lifted the cash rate again, to 4.85 percent. That is the fifth rise this year and, by several accounts, an 18-year high. The major banks have passed it on, with many variable owner-occupier rates now sitting around 6.75 percent. The next RBA decision lands on 8 December.
The cumulative effect is what stings. According to analysis from MacroBusiness, this year’s rises have added roughly 595 dollars a month to the average mortgage, about 7,140 dollars a year. The same analysis estimates repayments now take up around 37.4 percent of a typical household’s income, a whisker below the all-time record of 37.5 percent set back in 1989.
Why your rate might be higher than it needs to be
Here is the part that often gets missed. When rates rise, lenders pass the increase to existing customers quickly. But the sharpest deals tend to go to new customers walking in the door, not the loyal ones already inside. Over a couple of years the gap between what you are paying and what is available can quietly widen, and no one sends you a letter about it.
From previous experience, many people have not looked at their rate since they first set the loan up. In a year like this one, that is worth changing.
The one move that can ease the squeeze
It is not dramatic. It is a review. You find out where your rate sits against what is actually available right now, across the whole market, and then you decide what to do. Nothing more.
At Sanford Finance we are independent. We compare more than 40 lenders, we work for you rather than the banks, and there is no cost to you and no obligation. If your loan is already sharp, we will tell you that too. The point is simply to know where you stand, so any decision you make is an informed one.
One more change worth knowing about
There is a quieter shift working its way through the system this year. New lending rules limit how much a lender can approve above roughly six times your income. It does not make the headlines, but it can change how much you are able to borrow, and it is exactly the kind of thing a good broker spends their time navigating, especially for self-employed borrowers and more complex situations. If you are thinking about buying, refinancing or restructuring, it is worth a conversation.
What this means for you
If it has been more than a couple of years since you checked your rate, this is the moment to look. A quick review could confirm you are in good shape, or it could open up options you did not know you had. Either way, you will know where you stand.
Let’s take a look
Grab our free Refinancing Guide, or get in touch and we will arrange a quick, no-pressure rate review. Whenever you are ready.
Disclaimer: This article is general information only. It is not personal financial, credit or tax advice and does not take your circumstances into account. Figures quoted are drawn from third-party market commentary (including MacroBusiness and Finder) and are current at the time of writing. Please seek advice tailored to your situation before making a decision. Australian Credit Licence 388372.
Meta description: Repayments are at their highest share of income since 1989 after the RBA’s fifth rate rise. Here is the one move that can ease the squeeze.
