Most borrowers in Australia who fix their mortgage interest rate do so for three years or less. This means that the fixed-rate term on most loans taken out during the pandemic has expired recently or will do so over the coming two years. One-quarter of fixed-rate loans outstanding in early 2022 have now expired; most have rolled on to a variable interest rate, rather than re-fixing at a higher rate. Another 40 per cent of fixed-rate loans outstanding in early 2022 will expire by the end of 2023 and a further 20 per cent by the end of 2024. This equates to 590,000 loan facilities in 2022, 880,000 in 2023 and 450,000 in 2024. The profile of expiring fixed-rate loans is similar across the states and territories and between capital cities and regional areas.
The analysis in this article draws largely on the Bank’s Securitisation dataset, which covers around one-third of outstanding housing credit (Fernandes and Jones 2018), liaison with major banks and survey data on household balance sheets.
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