Federal Treasurer says he’s concerned about the impact of mortgage changes

Treasurer Jim Chalmers says he’s worried for the thousands of mortgage holders who will be hit with big jumps in their interest rates.

Federal Treasurer Jim Chalmers has hinted at further cost-of-living relief as the government fears more Australians will face further financial stress when their mortgages change this year.

“We are very concerned about people coming off fixed rates on to much higher variable rates,” he told ABC 7.30 on Tuesday.

“That will be a key pressure and a key concern in 2023.”

One fifth of mortgage holders who signed up for a home loan during the pandemic period of ultra low interest will have their fixed rates rolled over by the end of the year.

The RBA are looking to raise interest rates today putting more pressure on families. Picture: NCA NewsWire / John Gass

Most of the loans taken out during that period were struck at interest rates of between 1.75 per and 2.25 per cent.

Since then, the Reserve Bank has aggressively hiked the cash rate in an attempt to curb skyrocketing inflation, which hit 7.8 per cent in the year to December.

Mr Chalmers said the government needed to help Australians cope.

“Our job is to provide that relief where we can do it in a responsible and affordable way,” he said.

“It is about getting wages moving and that’s our focus.”

The RBA will hold its first board meeting of the year next Tuesday, where most economists expect another hike in the official rate as it continues to battle to bring inflation down.

“Higher interest rates, unfortunately, for mortgagees particularly ... are the way that they go about that task.

“That’s happening around the world.”