Get ready for Australia’s dark days of mortgage stress

  • Homeowners who have been wrestling with their mortgage repayments are about to find things can get a whole lot worse as the Reserve Bank and the financial regulator hand the big banks two more reasons to hike rates.

The worst hit will likely be those who waded into frothy capital-city housing markets at the tail end of the boom.  In its latest meeting the RBA warned that as many as eight official rate hikes are on the way as the official cash rate heads for a new normal of 3.5 per cent, while the Australian Prudential Regulation Authority has raised bank equity targets by 150 basis points to 10.5 per cent.

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The RBA has pegged 3.5 per cent as the new normal for the official cash rate. Photo: Peter Braig

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