The acting CEO of Westpac, Australia’s biggest bank, has claimed that today’s homeowners are paying off their mortgages at twice the average rate for the past 30 years.
Speaking in Canberra at last week’s Senate enquiry into the strength of the Australian banking sector, Westpac’s John Tate declared that “people are paying off debt faster than we have ever seen.” He stated that whilst Australia still has a high level of household debt, mortgage holders are anxious to repay it as quickly as possible because of the fear generated by the financial downturn.
According to Mr Tate Australian mortgage-holders now have an average of 40% – 50% equity, with many people taking advantage of lower interest rates to improve their equity percentage. He claimed that global economic conditions over the past few years had made both home and business owners extremely anxious.
At the same enquiry the Reserve Bank of Australia’s assistant governor Guy Debelle defended bank lending rates, which remain considerably higher than the cash rate, acknowledging that banks have to consider risk factors and market conditions when setting mortgage rates.
Sources: AAP, news.com.au