Karl Stefanovic has accused the Reserve Bank of “not caring” about the millions of Australians struggling to keep their homes amid repeated rate hikes.
The Today Show host blasted the RBA ahead of its July meeting on Tuesday, where the cash rate was suspended at an 11-year high of 4.1%.
The decision marked the first pause since April and follows 12 repeated interest rate hikes since May 2022.
Stefanovic said the RBA cared no less about the millions of families struggling to pay their mortgages amid crippling financial pressures.
“They single-handedly crushed and strangled Australian homes,” he said.
“Australians who go to work, pay their bills and have just made the mistake of wanting to own their own home. Now you are held hostage.
An excited Karl Stefanovic says the RBA cares no less about the millions of families struggling to pay their mortgages amid crippling financial pressures
“Everything you built is now at stake because our central bank missed the inflationary tidal wave. That’s still the worst part.
“It is not the respective governments that spend too much to carry the box. It’s you at home.
“You’re the one trying to put food on the table, pay your electricity bills and keep a roof over your family’s heads. It’s no wonder this is breaking the morale of Australians right now.
On Tuesday, the RBA decided to suspend interest rates at an 11-year high of 4.1%.
Governor Philip Lowe hinted at a tightening of monetary policy as inflation is still too high even after the most aggressive rate hikes since 1989.
Even if interest rates do not go up, mortgage repayments could still increase.
A borrower with an average mortgage of $600,000, who stayed on a variable rate, would pay $17,556 more per year on repayments than 14 months ago.
Monthly mortgage payments soared 63% to $3,769 from $2,306 as Commonwealth Bank’s variable rate for a borrower with a 20% deposit rose to 6.44% from 2.29 %.
On Tuesday the RBA moved to suspend interest rates at an 11-year high of 4.1% (pictured, potential buyers attend an auction in Melbourne in April 2022)
The RBA’s own Financial Stability Review, in April, estimated that 15% of borrowers would have “negative free cash flow” this year where their mortgage payments and essential living expenses would exceed their after-tax income.
AMP chief economist Shane Oliver said that would likely mean a million borrowers would be in serious mortgage trouble by Christmas.
He said that was because the RBA modeling was based on the cash rate falling to 3.75% “and we are now well beyond that”.
“We are now seeing more and more evidence that rate hikes are biting,” he said.
Credit-rating agency Moody’s Investors Service revealed on Wednesday that mortgage delinquencies, where borrowers fall 30 days or more behind on their repayments, increased in the March quarter.
At the July Reserve Banks meeting on Tuesday, Governor Philip Lowe (pictured) hinted at a tightening of monetary policy as inflation is still too high despite repeated rate hikes
Analysts Helen Liu and Alena Chen said borrowers who have only recently taken out a home loan are most at risk.
“We expect delinquencies to continue to rise over the next 12 months due to high interest rates and inflation,” they said.
“Borrowers who took out mortgages at very low interest rates in the few years before the Reserve Bank’s monetary tightening cycle are at particular risk.”
The RBA is bracing for 880,000 fixed-rate mortgages to expire in 2023, with some borrowers facing a steep 88% increase in their monthly repayments.
Origin: | This article originally belongs to Dailymail.co.uk