Karl Stefanovic loses out to Reserve Bank and Albanian government as Aussies risk losing their homes to interest rate hikes: ‘Everything you built is at stake’
- Karl Stefanovic explodes Reserve Bank in fiery speech
- He said the RBA had ‘crushed, strangled’ households
- Cash rates paused at an 11-year high of 4.1 percent
Karl Stefanovic has accused the Reserve Bank of ‘not giving a damn’ 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 spot rate paused at an 11-year high of 4.1 percent.
The decision marked the first pause since April and follows 12 repeated rate hikes since May 2022.
Stefanovic said the RBA couldn’t care less about the millions of families struggling to pay their mortgages amid crippling financial pressures.
“They single-handedly crushed and strangled Australian households,” he said.
“Aussies who go to work, pay their bills and just made the mistake of wanting to own their own home. Now you are held for ransom.
An excited Karl Stefanovic said the RBA couldn’t care less about the millions of families struggling to pay their mortgages amid crippling financial pressures
“Everything you built is now on the line because our central bank missed the inflationary wave. However, this is the worst.
“It is not overspending on respective governments carrying the pot. It’s you at home.
‘You try to put food on the table, pay your energy bill and keep a roof over your family’s head. It’s no wonder it’s killing the Aussies right now.”
On Tuesday, the RBA decided to pause interest rates at an 11-year high of 4.1 percent.
Governor Philip Lowe hinted at more monetary policy tightening as inflation is still too high even after the most aggressive rate hikes since 1989.
Even if interest rates don’t rise again, mortgage payments could still be increased.
A borrower with an average $600,000 mortgage, who stayed on a variable rate, would pay $17,556 more per year in principal payments than they did 14 months ago.
Monthly mortgage payments are up 63 percent to $3,769, up from $2,306, while a Commonwealth Bank variable rate for a borrower with a 20 percent down payment rose from 2.29 percent to 6.44 percent.
On Tuesday, the RBA decided to pause interest rates at an 11-year high of 4.1 percent (pictured shows potential buyers attending an auction in Melbourne in April 2022)
The RBA’s own financial stability assessment, in April, estimated that 15 percent of borrowers would have “negative excess cash flow” this year if their mortgage payments and essential living expenses exceeded their after-tax income.
AMP chief economist Shane Oliver said this would likely mean a million borrowers would be in severe mortgage stress by Christmas.
He said this was because RBA modeling was based on a drop in cash rates to 3.75 percent “and we’re well past this now.”
“We are now seeing increasing evidence that rate hikes are corrosive,” he said.
Credit rating agency Moody’s Investors Service revealed Wednesday that mortgage delinquencies, where borrowers are 30 days or more behind on their payments, had risen in the March quarter.
At the Reserve Banks meeting on Tuesday, Governor Philip Lowe (pictured) hinted that monetary policy will be tightened further as inflation remains 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 increase 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 entered its monetary tightening cycle pose a particular risk.”
The RBA is bracing for 880,000 fixed-rate mortgages due in 2023, with some borrowers facing an abrupt 88 percent increase in their monthly repayments.