The managing director of the Finance Brokers Association of Australia (FBAA) says he is dumbfounded by Reserve Bank (RBA) governor Philip Lowe’s comments recommending that Australians cut back spending and find additional work to pay for increased mortgage repayments.

“Clearly the Governor doesn’t realise that mortgage holders are already sacrificing as they struggle to meet the burden of 12 rate rises in just over a year,” said FBAA managing director Peter White AM.

Mr White said the FBAA’s recently released 2023 ‘Australian mortgage and rental affordability survey’ showed that 28 per cent of Australians with a mortgage have already taken additional work while 30 per cent were considering it in April, and most probably have by now.

“We also found that 61 per cent of mortgage holders have cut back on weekly spending including groceries, 37 per cent have cancelled holidays, 27 per cent have withdrawn from offset and savings accounts and 61 per cent have cut back on leisure and social activities.”

“So my question to Mr Lowe is this: How much more can Australians bear and why should they suffer more because the RBA failed to prepare Australians by keeping rates so low for so long when the global indicators clearly indicated rate rises were coming?”

Mr White said the FBAA had predicted the situation Australians are facing today and it is ‘mind-blowing’ that the RBA didn’t.

“They should have acted earlier and raised rates over a longer period in smaller increments.”

He again called on the Australian Prudential Regulation Authority to immediately lower the 3 per cent loan serviceability buffer for mortgages, so that people can refinance easier.

“So many borrowers are struggling to refinance because of this buffer, which was necessary when rates were lower but should be adjusted now.

“I also urge the RBA Governor to better understand the overall effect these rates are having on the economy and people, and pause rate rises for at least four months.”