Mortgage interest bill up to an extra $26,000 to $50,000 for average home loan since 2022

Australia’s mortgage interest bill has tripled under the weight of 12 rate hikes in the more than two years since Labor won office.

Homeowners Carl and Angelica Jocumsen with son Sam. Picture: Liam Kidston

Australia’s mortgage interest bill has tripled under the weight of 12 rate hikes in the more than two years since Labor won office, with every household paying tens of thousands of dollars more.

Families have paid $26,000 to $50,000 extra in interest on the average mortgage in each state since the federal election in May 2022, by which time the Reserve Bank of Australia had begun a cycle of lifting the cash rate to tackle soaring inflation.

National Accounts figures show Australians paid a total of $31.2bn in mortgage interest rates across the entire economy as of the September quarter this year, almost triple the $10.9bn paid in the March quarter of 2022.

The highest extra interest bill of $50,000 was in NSW where the average mortgage was $780,000 in 2022, while the lower $26,000 bill was in the Northern Territory where the average home loan was $410,000, according to Coalition analysis based on RBA lending rates and Australian Bureau of Statistics lending finance data.

In Victoria, where mortgages averaged $640,000, people have paid an additional $41,000 in interest, Queenslanders with a $540,000 home loan have paid $35,000 extra, and South Australians with a $460,000 mortgage have forked out $30,000 more.

In Tasmania, where the average mortgage was $450,000, the extra interest cost households $29,000 each.

With inflation moderating and the headline rate now within the RBA’s target band, economists are divided on whether the central bank will deliver a cut in February or at its next meeting in May.

If the board decides to wait, mortgage holders would be on the hook for a further $5000 to $9000 in interest payments.

Shadow treasurer Angus Taylor

Shadow treasurer Angus Taylor said Australians had made great sacrifices to keep a roof over their heads.

“Many have postponed family holidays, cut back on essentials like food and clothing, have put off seeing a doctor, some have even been forced to take on a second job,” he said.

“These sacrifices are a constant reminder of the toll Labor’s homegrown inflation is having on households.”

A spokesman for Treasurer Jim Chalmers acknowledged families’ mortgage pain, but said the cost of living would be worse under the Coalition.

“Ever since they started rising under the Coalition, higher interest rates have put substantial pressure on household budgets,” he said.

“Inflation was much higher and rising under the Liberals and now it’s much lower and falling under Labor.”

Brisbane homeowners Carl and Angelica Jocumsen have been forced to make lifestyle changes to afford their mortgage payments.

Ms Jocumsen, of Balmoral, moved from part-time to full-time work to cover their $500,000 mortgage.

“We had our home loan fixed and then when the interest rate started rising, it went more than triple our payments per week,” she said.

“It had a really, really big impact on our family.”

Ms Jocumsen said the family had made changes to where they shopped to reduce expenditure, while allowing their two sons to play one sport each.

Mr Jocumsen said he would welcome an interest rate cut.

“It would take a little bit of pressure off,” he said.

“We are looking forward to it, but I’m not really holding our breath.”