Most Borrowers Ahead On Repayments

Bank economists say homeowners shouldn’t fear rate rises, as many can comfortably absorb increases.

ANZ chief executive Shayne Elliott says the cash rate could be 2% by the end of the year, which, although higher than the recent low of 0.1%, is still low by historic standards.

ANZ has $285 billion worth of home loans on its books and Elliot says over 70% of its customers are well ahead on their repayments.

He says when rates went down most customers didn’t reduce the amount they were repaying, so they have built up a buffer.

That means that once the bank lifts its interest rates in response to the RBA move, 70% of its customers won’t have to find more money as they are already paying above what is needed to service the mortgage.

Elliott says many of their customers are now two years or more ahead on their repayments and only 0.7% are behind on their repayments.