Aussies pay equivalent of Apple CEO's net worth to cover monthly mortgage

New analysis from Mozo reveals Australians are collectively paying an extra $3 billion per month to cover rising home loan repayments after the 13 cash rate hikes since May 2022.

This staggering figure scrapes in just under Apple CEO Tim Cook’s net worth, according to Forbes.

The rate hikes from the Reserve Bank of Australia (RBA) have hit Aussies harder and faster than central banks in other advanced economies, forcing Australians to find an extra $60 billion since the rate hikes began, despite the cash rate being almost 1% lower than the RBA’s US or UK counterparts.

“In comparison to other economies, Aussies really feel the pinch of every cash rate hike, and this can be seen in the exorbitant amount of interest now being paid on mortgages down under,” says Peter Marshall, Mozo banking and rates expert.

Most Aussies are on a variable rate, contributing to the 'disproportionate burden' 

Marshall says Australian borrowers are more exposed to rate hikes because of the make-up of the Australian mortgage market, compared to that of the US or UK. 

“The disproportionate burden of these rate hikes is because the Australian mortgage market is predominantly variable rate home loans, and cash rate hikes are passed on faster to those with variable rate mortgages,” he said. 

In Australia, variable home loans comprise about 70% of all loans, compared to just 5% in the US and 20% in the UK, according to the IMF. 

“RBA cash rate hikes have hit our mortgage market harder than those countries with mostly fixed-rate mortgages, so the pain for Aussies has been more intense.”

To put pain into numbers, the average Australian home loan now costs $1,338 more per month than it did two years ago, in May 2022. 

While every Australian state and territory has felt the pinch of monetary policy, New South Wales has been slugged with an extra $1,638 a month, taking the average repayment in May 2024 to $5,174.

Australian borrowers struggling to find the extra cash each month can compare home loans to see if there’s a lower interest rate to refinance with. 

The current average variable rate in the Mozo database is 6.80% p.a. (OO, $400k, <80% LVR). However, at 3 May 2024 there were over 190 variable rates that came in below the average. 

This means Australians on a rate above the average may have plenty of options to help shave down the monthly mortgage bill. Take a look at the featured home loans below to kickstart your search.