Homeowners fork out over $1,300 more per month than pre-RBA rate hikes

According to a new report from Mozo, the average Australian home loan customer now pays over $1,337 more per month than in May 2022, before the Reserve Bank of Australia (RBA) began its rate-hiking cycle to slow inflation. 

Mozo finance expert, Rachel Wastell, says the pressure is on for Australian homeowners to find the extra money each month. 

“Thirteen rate hikes and the most aggressive rate hiking cycle since the early 1990s is putting significant pressure on mortgage holders as they struggle to cover rising repayments,” Wastell said.

“The analysis shows that most Aussie mortgage holders have most likely had to find an extra thousand dollars or more every month. That’s nothing to sneeze at, especially in the lead-up to Christmas.”

The 13th RBA hike in November adds extra $95 to the monthly bill 

In November alone, the average Australian's repayment can be expected to swell by $95 after the 13th RBA rate hike pushed rates up earlier this month. 

But on a state-by-state basis, some are looking at a monthly rise of almost $120 more – hardly change you’d find digging between the sofa cushions.

State by state: How much are home loan repayments rising by?

The average Australian home loan size is $598,867, according to ABS lending indicators, which is where the average repayment increase of $1,337 comes from.

But that figure differs wildly depending on the state. 

Borrowers in the Northern Territory, where the average home loan size is $437,821, have seen repayments increase by $977 on average since May 2022, bringing monthly repayments to $3,058. 

But those in New South Wales, where homes are vastly more expensive, at an average home loan size of $756,821, have seen the average repayment balloon by $1,690 per month – making NSW the state with the most expensive repayments, at $5,286 on average.

Source: mozo.com.au based on average owner occupier loan size from September 2023 ABS Lending Indicators, using the average advertised variable home loan rate in the Mozo database for owner occupiers paying principal and interest with a loan-to-value ratio of 80%. The comparison between repayment amounts is using the average variable rate of 3.02% p.a. from the 3rd May 2022 and the average variable rate of 6.62% p.a. on the 6th November 2023 with 0.25% p.a. added to make 6.87% p.a.

Wastell recommends keeping an eye on the market to find lower interest rates as a way to help lower your mortgage repayments, especially if your current rate starts with a 6, 7, or 8. 

While the pickings are slimmer than last month, becoming few and far between, there are still lenders out there offering rates below 5.75% p.a., meaning it could be a good time to refinance your home loan if you can.  

Home loan rates below 5.75% p.a. 

For owner-occupiers paying principal & interest on a $400,000 home loan, with a loan-to-value ratio (LVR) of <80%, options include: 

• Homeloans360 | Owner Variable Home Loan | 5.59% p.a. (5.59% p.a. comparison rate*)
• Pacific Mortgage Group | Standard Variable Home Loan | 5.59% p.a. (5.59% p.a. comparison rate*)
• Resi | Agility Variable Home Loan | 5.69% p.a. (5.74% p.a. comparison rate*)
• The Capricornian | Country to Coast Variable Rate Offset Home Loan | 5.69% p.a. (5.70% p.a. comparison rate*)
• The Mutual Bank | Special Budget Home Loan | 5.69% p.a. (5.70% p.a. comparison rate*)
• Yellow Brick Road | Agility Variable Home Loan | 5.69% p.a. (5.74% p.a. comparison rate*)
• BankVic | Variable Home Loan | 5.70% p.a. (5.70% p.a. comparison rate*)
• Unloan | Unloan Variable | 5.74% p.a. (5.65% p.a. comparison rate*). 

While those are among the lowest home loan interest rates in the Mozo database, there are still a few lenders out there offering rates below 6% p.a. 

Compare home loan rates below to see what the market is offering.