Another rate rise could hit young Australians harder than 1990s boom rates
An expected rate hike will push younger borrowers to spend 52% of salary on mortgages, exceeding 1990s burden.
An expected RBA rate hike on Tuesday will push younger Australians into worse mortgage stress than their parents faced in 1990 despite headline interest rates being far lower, Shadow Treasurer Tim Wilson claims.
Someone earning $108,352 with an average new mortgage of $731,000 would need to spend 52 per cent of their pre-tax salary on repayments. In February 1990, when the cash rate hit more than 17 per cent, an average earner paid only 42 per cent of their salary on mortgage repayments.
The difference lies in housing affordability: the average new loan now costs 6.8 times annual salary compared with just 2.5 times in 1990. Wilson blamed government spending, which now makes up 26.9 per cent of GDP against 22.9 per cent in 1989-90.
NSW Premier Chris Minns warned another rate rise would cost jobs and force shop closures across the state's economy.
- 4.85 per cent
- Expected cash rate
- 52 per cent
- Salary on mortgage payments
- 42 per cent
- 1990 mortgage burden
- 6.8 times
- Current loan to salary ratio
Why it mattersYounger Australians face a mortgage crisis that cuts deeper into household budgets than any single rate rise of the past three decades, reshaping who can afford to buy a home.
AustraliaAn RBA rate hike will directly affect Australian mortgage holders, pushing thousands into deeper stress and potentially slowing home sales and economic activity across all major cities.
✓ Claims checked against the source and corrected before publish. checked 1 d ago
