Interest rates: Mortgage cliff turns into a wave that is already subsiding

Already a subscriber?The tail end of a so-called “mortgage cliff” is fuelling a rosier outlook for housing delinquencies, as borrowers come to terms with higher-for-longer interest rates.the cliff was used to describe the 880,000 households that would have to refinance mortgages

PEXA’s refinancing index landed at 134.8 points in the week ending July 14, off some 38.8 per cent compared to the same time last year, with refinancing values also flattening. “Were not seeing further raises in retail rates from here, but the most likely scenario is stability from here and quite a long period of that,” she said. “People have been able to adjust, and hopefully, we won’t see more triggers.”

Mr Mott said owner-occupier lending was more subdued, with some marginal borrowers decreasing mortgage repayments to make ends meet. The PEXA research showed Australians spent $585 billion on acquiring residential property in the year to June 30, a jump of 10.8 per cent on the prior 12 months. There were about 700,000 settlements, up 5.1 per cent.

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