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Kochie demands the government help EVERY Australian who used the Reserve Bank Governor’s ‘abandoned’ advice to get a home loan as thousands plunge off the ‘mortgage cliff’
- David Koch asks the government to guarantee mortgage loans
- He said the RBA governor gave borrowers “abandoned” advice
- RBA chief Phillip Lowe to face parliament over rate hikes
Sunrise presenter David Koch has called on the government to guarantee all home loans obtained following Reserve Bank Governor Phillip Lowe’s “abandoned” advice that interest rates would not rise until 2024.
With thousands of homes facing the so-called mortgage cliff, where offers on low fixed-rate mortgages will expire, meaning a huge jump in payments, Koch said many could lose their homes.
“All these Australian households, imagine the emotional pressure they would be under right now, facing the prospect of a house sale,” he said on the Channel Seven breakfast show on Wednesday.
It would be destroying families and destroying relationships. That’s the human side of it.
Sunrise host David Koch (pictured right) suggested that the federal government guarantee home loans obtained when Reserve Bank Governor Phillip Lowe said interest rates would not increase until 2024.
Koch proposed that the Albanian government should go to the banks and say ‘we will guarantee the loans of these people because they followed the negligent advice of the Reserve Bank’.
“They still have to pay back their loans, but a lot of them have negative equity and the bank will be about to sell them,” Koch said.
“It’s not a handout, it’s just telling the bank, don’t close them, we guarantee it until things get better.”
Negative equity occurs when a property is valued below the loan taken to purchase it.
RBA chief Dr Lowe (pictured) will be feeling the heat today as he faces questioning in parliament over rapidly rising interest rates.
Koch’s Sunrise co-host Natalie Barr initially raised her eyebrows in surprise at the suggestion, but by the end of the explanation she nodded in agreement.
The Reserve Bank governor will face questioning in federal parliament on Wednesday over the nine rapid interest rate hikes that have occurred since he suggested they would not rise until 2024.
Last week, the Reserve Bank raised interest rates to 3.35 percent, in the latest increase.
Koch’s fellow Sunrise host, Natalie Barr (pictured left), recorded his proposal for government home loan guarantees with a surprised look.
For those coming out of fixed-rate deals, this could mean a jump from paying 2 percent on your loan to more than 5 percent.
This means an additional $1,114 for a borrower with an average home loan of $600,000 who is moving from an ultra-low fixed rate of 2 percent to a new variable rate mortgage of 5.26 percent.
Dr. Lowe will be questioned by the economic legislation committee as the Reserve Bank heralds more interest rate hikes to rein in inflation, which grew 7.8 percent annually in the December quarter.
The federal government is concerned about the 800,000 fixed-rate mortgage holders who are yet to feel the brunt of rising rates.
The future of the RBA leadership has also been in question ahead of the treasurer’s decision on whether to extend his term in the second half of 2023.
Several MPs, including Labor MPs, have questioned Dr Lowe’s future based on RBA predictions issued during the pandemic that interest rates would not rise until 2024.
Treasurer Jim Chalmers has declined to comment on Dr. Lowe’s future as Reserve Bank governor.
The RBA is also subject to an independent investigation, the results of which will be known in March.