Mortgage holders could face large jump in repayments if interest rates reach 3%, RBA says

Deputy reserve bank governor, Michele Bullock, says most Australians are well placed' to absorb impact of rate rises

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Up to 30% of mortgage holders could struggle to keep up with their home repayments if interest rates were to increase to 3%, according to the Reserve Bank of Australia, which says first-home owners, late entrants to the market and low-income loan holders are most at risk.

With the bulk of low fixed-rate loans due to expire in the next two years, about half of those coming into the new variable market will face increases in their repayments of at least 40%. For those whose fixed loans expire in the middle of next year, the reserve bank estimates a median increase of about $650 a month in repayments, or a 45% increase.

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