Home News RBA Governor Philip Lowe apologises to Australians struggling with mortgages

RBA Governor Philip Lowe apologises to Australians struggling with mortgages

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Reserve Bank Governor Philip Lowe has given Australians unclear guidance that has led hundreds of thousands to take out big mortgages as they expect interest rates to stay low until 2024. I apologize to the Australian people for this.

Towards the end of 2020, and for most of last year, it is likely that interest rates will not rise until 2024, Dr. Lowe said.

At that time, Nearly 300,000 Australians borrowed more than 6 times their incomesome with a 10% deposit, based on that guidance.

But in November, the Reserve Bank of Australia raised interest rates for the seventh straight month and warned it expected inflation to peak at 8% by the end of the year, much higher than expected.

The cash rate is currently at 2.85%, and many people are paying variable interest rates as high as 6-7% of mortgages, struggling to pay it off as the cost of living rises.

Dr Lowe answered questions at a Senate Economics Committee hearing in Canberra on Monday and said interest rates would continue to rise until inflation subsided.

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