Three-quarters of Australian borrowers have seen their interest rates rise

Australian borrowers have felt the pinch of rising interest rates, with 77.1% of mortgage holders already experiencing a rate hike, according to a new survey.

Data from Savvy revealed that 25.7% of those who experienced an interest rate hike saw their repayments increase by 6%, putting more pressure on household budgets than ever before.

Due to the increase in mortgage repayments, 60.6% of borrowers said they would “spend less” on consumer and non-consumer goods and would prioritize the mortgage if rates rose.

Savvy chief executive Bill Tsouvalas said Australian budgets were stretched.

“The survey results presented here show the economy in action – a rise in interest rates means a corresponding downward trend in overall spending,” Mr. Tsouvalas said.

“But that’s little comfort to Australians who are already doing it hard and set to do it harder as the Reserve Bank of Australia puts the brakes on a little more every month.”

The survey found that 18.1% of mortgage holders had their repayments increased by 6% to 10% and 6.26% faced an 11% to 20% hike.

At the top of the scale, 1.34% reported increases greater than 21%.

As for corresponding pay rises, 34% of Australians surveyed said their pay had not changed since 2021.

While 26% reported a salary increase of up to 5% and 7% say their salary increased between 6 and 10%.

Mr Tsouvalas said the best thing for those struggling to repay was to lock in their interest rate.

“Only 26% of mortgage holders in our survey said they would try to lock in their current mortgage rate,” he said.

“It should be 100%.

“If you’re on a mortgage, now is the time to lock in a fixed rate or consider refinancing.”

“Don’t put it off any longer. This should be your first priority.

To try to better manage higher borrowing costs, 32% of homeowners said they were relying on their savings to fund the increase, with the same proportion saying they would try to increase their income.

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