Revealed: Interest rate change about to cripple NSW homeowners

More than 880,000 Australian households are scheduled to come off fixed interest rate mortgages this year. The cost will be eye-watering, especially in NSW. See the figures here.

The double whammy of interest rates and inflation is going to leave hundreds of thousands of NSW households worse off an average of more than $23,000 per year as they come off fixed mortgages over the course of 2023, new data has revealed.

According to data prepared for Reserve Bank governor Philip Lowe and seen by The Daily Telegraph, some 58 per cent of home loan accounts with fixed rates in NSW are expected to move to variable rate arrangements later this year, adding an expected $1,705 to their monthly mortgage bills, or more than $20,000 per year.

When added to rising grocery and electricity prices, the total monthly hit to NSW households moving off variable rates is expected to be $1938 a month, or $23,255 a year.

Analysis shows such families in NSW are set to be worst off than other Australians, with residents of Victoria, Queensland, and South Australia copping smaller hits due to cheaper housing and lower cost of living.

Across Australia, some 880,000 households are on fixed mortgages expiring this year.

Suburban households are being pinched by mortgage stress. Photo: Alex Wisser

While the RBA does not keep state by state data, as a percentage of population at least 250,000 of these accounts would be expected to exist in NSW.

Kym Van Den Heuvel, who owns Barenz Mediterranean restaurant and cafe in Camden can already see the difference in customer behaviour caused by rising interest rates and energy costs.

Kym Van Den Heuvel in his Camden restaurant , Barenz. 58 per cent of NSW mortgage holders will be paying nearly $2,000 more a month on average for housing, based on data RBA data, raising the cost of living and eroding consumer confidence. Picture: John Appleyard

“There’s definitely been a change in how customers are coming into the hospitality market,” Mr Van Den Heuvel said.

“Patronage is definitely lower, you can see the pressures of cost of living and concerns about interest rate rises holding back every day spending.”

“The little luxuries like hospitality get scaled back first,” he said.

Mr Van Den Heuvel added that he was not immune his restaurant’s costs for gas and electricity have gone up more than 30 per cent recently.

Shadow Treasurer Angus Taylor. Picture: Martin Ollman

“We do our best to absorb the costs without instantly passing the costs on but at some point that has to happen,” he said.

Shadow Treasurer Angus Taylor said, “This is the ugly reality of inflation.”

“We know many of the 800,000 Australians who locked in fixed rate mortgages are about to face tough increases on their repayments.”

“Many Australian families with a typical mortgage will be slapped with a $1700 increase overnight – enough to tip some over the edge.”

“This is on top of soaring grocery bills, skyrocketing power bills and rapidly rising insurance costs.”

“It’s getting harder by the day for Australian families and small businesses to make ends meet under Labor.”

Originally published as Revealed: Interest rate change about to cripple NSW homeowners