Savings suffers as home repayments leap
Australian household mortgage repayments have trebled in the last 10 years, while incomes have only risen by 75 per cent. Over the past year alone, the mortgage bill has increased by 20 per cent. Now with interest rates on the rise, mortgage repayments will lift again further shrinking the household budget available for other items. Yet consumer spending on things other than mortgages has not suffered up until now, according to the Bureau of Statistics. In the year to September, consumers spent more on cars, household items, entertainment, clothes, education and health. With both mortgage repayments and general spending on the rise, it is household savings that's suffered. Thirty years ago Australians saved 13.6 per cent of their net, after-mortgage income. Today we save nothing and even borrow to spend. Over the past 18 months, more than $40 billion in home equity has been withdrawn to spend on cars, holidays and household items.