The Bank of Canada estimates that mortgage borrowers who renew their loans over the next few years will see a spike in their monthly payments. This is due to higher borrowing costs and stress in the global banking system, which has exposed cracks in the financial system. Financial institutions relying on low interest rates are particularly vulnerable.
via theglobeandmail:
The Bank of Canada estimates that mortgage borrowers who renew their loans over the next few years will see a spike of 20 per cent to 40 per cent in their monthly payments.
So far, the bulk of borrowers have not felt the sting of higher interest rates because their mortgages have fixed monthly payments. But the bank said that by 2026, nearly all borrowers have to renew their mortgages, resulting in higher payments.
“In light of higher borrowing costs, the Bank of Canada is more concerned than it was last year about the ability of households to service their debt,” the central bank said in its annual Financial System Review. “More households are expected to face financial pressure in coming years as their mortgages are renewed.”
The central bank also highlighted risks related to stress in the global banking system, which has come to the fore in recent months with the failure of several U.S. banks and the emergency sale of CS-N +2.27%increase
. The rapid rise in interest rates has exposed cracks throughout the financial system, and the central bank warned that financial institutions whose business models rely on low interest rates are particularly vulnerable.
via ownhome:
As the rate of Australian homeowners continues to descend, it’s a strange time for those invested in the property market. Whether you are currently a homeowner, looking to buy a house, or simply interested in the movement of house prices, the average loan size is something we can all be curious about.
So what is the average mortgage? At the end of 2022, it was $601,797, based of lending indicators from the Australian Bureau of Statistics (ABS).
However, this figure only tells a part of the story. The average home loan in Sydney is an entirely different thing from the average home loan in the regional Northern Territory. We’ll take a look at the average Australian home loan for investors and owner-occupiers, hopefully giving you a more complete picture of Australian real estate.
The average mortgage around Australia
There are a few factors to remember when looking at average figures for home loan size. These include the location of the property (each state has a very different property market), whether it is an investor or owner-occupier loan, and whether it is for an existing property or a newly built property.
Looking at all new home loans (excluding refinancers), the average loan amounts for each state are:
-
New South Wales (NSW): $752,164
-
Australian Capital Territory (ACT): $636,747
-
Victoria (Vic): $618,109
-
Queensland (QLD): $532,535
-
South Australia (SA): $479,253
-
Western Australia (WA): $478,462
-
Northern Territory (NT): $440,260
-
Tasmania (Tas): $459,016
With current rates that’s close to $50,000 cash per year.