Phil Lowe received heavily subsidised home loan for 1997 house purchase

The Reserve Bank governor has been branded “out of touch” after it was revealed he was a beneficiary of a taxpayer-subsidised mortgage scheme.

Reserve Bank governor has been branded “out of touch” after it was revealed he purchased his Sydney home with the aid of a heavily discounted, taxpayer-subsidised mortgage.

Mr Lowe’s five-bedroom home in Randwick, purchased in 1997 for $1.075m -– the same year he was appointed head of the RBA’s economic research department – was aided by a half-price loan from the RBA, Sky News uncovered.

According to the report, Dr Lowe took out two loans to purchase his Randwick property, including $241,000 loaned by the Reserve Bank.

The broadcaster reported his interest rate was locked at half the standard variable rate being paid by Commonwealth Bank customers under the scheme.

An RBA spokesperson confirmed that Dr Lowe had repaid his loans, did not have a borrowing facility with the RBA and all financial disclosures were correct.

RBA governor Philip Lowe purchased his Randwick home for $1.075m in 1997. Picture: NCA NewsWire / Nikki Short

Radio host Ben Fordham told listeners that the discount reeked of a double standard. Picture: Nine

Radio host Ben Fordham told listeners that despite the discount being within the rules at the time, it reeked of a double standard.

“So let’s get this straight, the RBA helps set the home loan rates for the rest of us, but RBA members have access to a special set of rules,” Fordham said.

“It highlights how Philip Lowe is out of touch with the average Australian … He doesn’t share our pain, he’s living on another planet!”

Taxpayer-subsidised mortgages for RBA employers were relatively commonplace until the Officers’ Home Advances Scheme was scrapped in 2001. News Corp Australia in 2003 revealed around a quarter of RBA employers were receiving subsidised mortgages at the time.

The RBA spokesperson said 11 loans remained on the scheme, totalling $300,000.

Dr Lowe last year said he no longer had a mortgage.

“I’ve lived in my house for more than 25 years and over those 25 years I’m in the fortunate position of having paid it off,” he said last February.

The revelation of the Reserve Bank boss’ discount mortgage came a day after Dr Lowe handed down the 10th consecutive interest rate hike and as at least 880,000 Australians begin to brace for a “fixed-rate mortgage cliff” when they move to variable loans this year.

He suggested on Wednesday the central bank might soon be able to pause interest rate hikes as inflation falls from its peak.

Dr Lowe, who has worked for the central bank since 1980 and earns about $1m a year, has repeatedly come under fire for telling Australians in 2021 that there would be no interest rate hikes until 2024.

He conceded the board made an “embarrassing error”.

Dr Lowe said the RBA was looking to soon pause interest rate rises. Picture: NCA NewsWire / Gary Ramage

Following a speech to the AFR Business Summit on Wednesday, Dr Lowe would not be drawn on whether the rate hikes were putting a strain on his own hip pocket.

He laughed off the question but acknowledged people who were feeling the brunt of the interest rate hikes were those on the lower end of the income scale.

“I’m just one person in 26 million. So, my personal, um, circumstances, aren’t going to affect the aggregate, are they?” Dr Lowe said in response.

“It’s difficult because monetary policy is falling unevenly across the community and the people who have been most affected are people who have borrowed in recent times and having to pay a higher mortgage payment.”

Dr Lowe’s seven-year tenure as governor is set to expire on September 17, with Treasurer Jim Chalmers yet to decide whether he will reappoint him.

Originally published as Phil Lowe received heavily subsidised home loan for 1997 house purchase