Who had it worst - Cost of Living

The soccer world cup is on and I’ve been keeping myself updated on the action with SBS. Whilst scrolling I found this fantastic article on mortgage pressure and the cost of living. The full article can be viewed on the link below. It appears that things are financially tougher now than they have ever been for mortgage holders.

“A long-standing generational myth has been mathematically debunked by new analysis from KPMG, which shows that households currently are under greater mortgage pressure now than during the legendary interest spike of the late 1980s. The financial services company looked at historical Australian Bureau of Statistics (ABS) data and found households are now facing one of the heaviest interest burdens on record — experiencing tougher conditions than when the Reserve Bank of Australia (RBA) cash rate reached 17.5 per cent in 1989. Interest payments on debt as a percentage of household income reached a peak of 5.7 per cent during the 1989-1990 inflation spike. In 2023, that peak was 5.9 per cent. The second quarter of 2026 saw repayments creep back up to 5.4 per cent and are positioned to keep rising.”

Terry Rawnsley at KPMG stated, "If you've got a mortgage at 17 per cent, and that mortgage is $100,000, you're paying the same interest if you've got a $400,000 mortgage at 5 per cent," Rawnsley explained.

"It's not just about the interest rates, it's about how big the home loans have had to get for you to get into the housing market, which is driving up the interest-to-income ratio."

Who had it worse? The hidden shift behind Australia’s generational mortgage debate | SBS News