What an interest rate rise means for every Ipswich suburb | Full list

Homeowners across Ipswich may struggle to pay their mortgage when interest rates begin to rise, with experts suggesting a one per cent increase could push people to the brink of ‘mortgage stress’. Take a look at our interactive table to see how increased rates will impact you.

Homeowners in a number of Ipswich suburbs may struggle to pay their mortgage when official interest rates begin to rise, with many pushing their budgets to the limit in the pandemic property boom.

New data shows that even a rate rise of just one per cent could push entire suburbs to the brink of “mortgage stress”.

The worst affected will be Brookwater, where homeowners currently pay 29.2 per cent of their income on mortgage repayments.

With interest rates one per cent higher, a whopping 33.2 per cent of their income will be spent on mortgage repayments.

Karalee homeowners who currently set aside 22.3 per cent of their income for mortgage repayments would see that increased to 25.3 per cent, making them the second most affected in Ipswich.

They would be closely followed by Augustine Heights homeowners (19.5 per cent to 22.2 per cent), Springfield homeowners (16.5 per cent to 18.7 per cent) and Chuwar homeowners (16.4 per cent to 18.6 per cent).

The official cash rate set by the Reserve Bank of Australia sits at a record low 0.1 per cent, but some banks have already begun lifting their own fixed rates, with pundits tipping an official rate rise may come sooner than expected.

The Australian Prudential Regulation Authority (APRA) has also lifted its minimum interest rate buffer to three per cent.

REA Group experts analysed current median property values, average incomes (2018/19, ATO) and current average monthly mortgage repayments with a 2.5 per cent interest rate in each Queensland suburb.

The analysts then applied interest rate hikes of 0.25, 0.5 and one per cent, with many of the suburbs facing the biggest financial pile-on located in markets where prices have exploded.

But most Ipswich suburbs would still be under the general benchmark for mortgage stress – 28 per cent – if rates rose by one per cent.

That is because median house prices in Ipswich are significantly cheaper than in other parts of southeast Queensland, particularly Brisbane, the Gold Coast, and the Sunshine Coast.

Located in Ipswich’s Greater Springfield Development, Brookwater is the region’s most expensive suburb and will be the most affected by a rise in interest rates.

The most expensive suburb in Ipswich, according to realestate.com.au data, is Brookwater, where the median house price is $914,000.

However, a vast majority of houses in Ipswich suburbs are worth between $340,000 and $450,000.

There are currently 90 suburbs across Queensland where double income households contribute more than 28 per cent of their total income to their mortgage repayments.

But that number blows out to a whopping 159 suburbs when rates rise by one per cent.

In Brisbane, double income households in Robertson currently contribute 47.9 per cent of their total income on their mortgage, but that income-to-repayment ratio blows out to 49.4 per cent with a rate hike of 0.25 per cent, 51.4 per cent with an increase of 0.5 per cent and 54.4 per cent with a one per cent rate hike.

That pressure doubles for single income households, with the average individual annual income in Robertson just $48,745, according to ATO figures.

Some Ipswich real estate agents have said they are not concerned about the prospect of rising interest rates and what that could mean for local homeowners and buyers, while other experts have suggested an increase is imminent and will devastate borrowers.

“My opinion is that rates aren’t going to rise in the foreseeable future,” owner and principal of Johnson Real Estate Ipswich Adam Horth said.

“And I think demand’s just going to stay rampant because this western corridor is still one of the most affordable in all of Queensland.

“Demand for property in Ipswich, regardless of interest rates, is going to be very strong.”

He said he believed that would remain the case due to the region’s affordability and planned infrastructure.

Helene Shephard of First National Ipswich also said rising interest rates were nothing Ipswich homeowners and buyers should worry about just yet.

“I think the interest rates will be addressed at a government level and a financial institutional level,” she said.

“It’s been my experience that you will see fluctuations in interest rates through the decades.”

A one per cent rates rise would see repayments in Brookwater surge to 33.2 per cent of income.

She said she had faith in Ipswich’s lenders, as they had a duty of care to ensure no borrower extended themselves beyond what was manageable.

“I bought my first home when interest rates were 18 per cent,” she said.

“You adjust your lifestyle to get into the property market.”

Ms Shephard agreed that demand for Ipswich homes would likely remain high for another 12 to 18 months, given the region’s proximity to the city and its educational facilities and hospitals.

REA PropTrack economist Paul Ryan, on the other hand, said all borrowers should prepare for higher interest rates.

“With strong recent increases in housing prices, and an extended period of exceptionally low borrowing costs, many Australians have taken on bigger mortgages than ever before,” he said.

“With markets expecting increased interest rates as early as next year, borrowers may find repayments increasing earlier than expected.”