the bulk of the curve is behind us
Across Australia in 2024, nearly half a million households are confronting the end of pandemic-era fixed-rate mortgages, stepping from the shelter of historically low interest rates into a far harsher financial climate. The government's revised stage three tax cuts — modest in scale but meaningful in timing — arrive as a partial counterweight to repayment increases that can reach $6,000 a year on a typical mortgage. It is a moment that tests the resilience of ordinary families, and also the capacity of policy to soften, if not prevent, the harder edges of economic transition.
- 450,000 fixed-rate mortgages written during the pandemic are expiring in 2024, forcing borrowers from rates near 2% into a world closer to 6% — a jump that can add $6,000 annually to a $500,000 loan.
- Commonwealth Bank data shows housing interest payments surged 70.6% in a single year, a figure that lays bare just how much financial pressure has quietly accumulated across Australian households.
- Despite the scale of the shock, delinquency rates have not spiked as feared — most borrowers have already rolled onto variable rates and are, so far, holding on.
- The government's revised stage three tax cuts will return up to $2,179 a year to earners under $100,000, offering a targeted if incomplete bridge across the cash flow gap.
- Lendi CEO David Hyman reads the landscape cautiously: the peak of the mortgage cliff may be passing, but the burden on stretched families remains real and the relief only partial.
Half a million Australian homeowners are navigating one of the sharpest financial transitions in recent memory. The Reserve Bank has identified 450,000 fixed-rate mortgages — written during the pandemic when rates sat at historic lows — that are set to expire in 2024. For those borrowers, the shift is stark: rates of around 2 percent rolling onto variable rates near 6 percent, adding as much as $6,000 a year to repayments on a $500,000 loan. For families already managing tight budgets, that kind of increase can be the difference between stability and crisis.
David Hyman, founder and CEO of online mortgage broker Lendi, has watched the transition play out across his platform. He is measured in his optimism — the full weight of the so-called mortgage cliff has not entirely landed — but he has observed something significant: most of these loans have already rolled over without triggering the wave of defaults many had feared. Delinquencies remain low. People are coping, at least for now.
Into this moment, the government's revised stage three tax cuts offer a modest but well-timed lifeline. Earners on up to $100,000 a year will receive up to $2,179 annually — not enough to close the gap entirely, but enough, in Hyman's words, to ease the burden. Commonwealth Bank economist Gareth Aird underscores the broader strain: interest paid on housing debt rose 70.6 percent in the year to September 30, a figure that reflects the quiet pressure bearing down on millions of Australians.
The picture that emerges is one of stress absorbed rather than catastrophe realised. The worst of the transition may be behind most borrowers, and the tax cuts — while no complete solution — go a reasonable distance toward keeping households afloat through the remainder of the curve.
Half a million Australian homeowners are stepping off a financial cliff this year, and the government's tax cuts may be the only thing keeping them from falling hard.
The Reserve Bank has identified 450,000 fixed-rate mortgages written during the pandemic—when interest rates sat at historic lows—that are set to expire in 2024. For the borrowers holding these loans, the math is brutal. A typical rate of around 2 percent will jump to close to 6 percent. On a $500,000 mortgage, that means an extra $6,000 a year in repayments. For families already stretched thin, it's the kind of shock that can unravel a household budget.
David Hyman, who runs Lendi, an online mortgage broker he founded in 2013, has watched this transition unfold across his platform. He's cautious about declaring victory—the full weight of what's being called the mortgage cliff hasn't fully landed yet—but he's noticed something worth noting. Most of these loans have already rolled onto variable rates, and delinquencies haven't spiked the way some feared they might. People are managing, at least so far.
The revised stage three tax cuts announced by the government offer a modest but meaningful lifeline. Someone earning up to $100,000 a year will take home an extra $2,179 annually. Hyman is careful not to oversell it, but he's clear about what it means: for borrowers caught in this squeeze, it "definitely eases the burden." It won't solve the problem—the gap between what people were paying and what they're paying now is still substantial—but it bridges enough of that gap to keep households afloat.
The broader picture is one of stress absorbed rather than catastrophe. Commonwealth Bank economist Gareth Aird points out that interest paid on housing debt surged 70.6 percent in the year to September 30. That's a staggering increase, and it reflects the reality facing millions of Australians. Yet the fact that delinquencies remain low suggests that most borrowers, despite the shock, are finding ways to cope.
Hyman's assessment captures the moment: the worst of the curve is behind us. The bulk of these loans have already transitioned to variable rates without triggering a wave of defaults. The tax cuts, while not a complete solution, go a reasonable distance toward closing the cash flow gap that opened up when rates jumped. For 450,000 households navigating this transition, that's the difference between managing and drowning.
Citações Notáveis
The revised tax cuts will definitely ease the burden for borrowers facing the mortgage cliff.— David Hyman, Lendi CEO
We are through the bulk of the curve and the revised tax cuts go a reasonable way to bridging the cash flow gap for borrowers.— David Hyman, Lendi CEO
A Conversa do Hearth Outra perspectiva sobre a história
Why does this matter now, in January 2024? What's the timing here?
These loans were written during the pandemic when the RBA had rates at record lows—people locked in at 2 percent. Those fixed periods are expiring this year. All at once, 450,000 households are moving from cheap fixed rates to variable rates that are now around 6 percent. It's a coordinated shock.
And the tax cuts—are they actually designed to address this, or is that just a convenient coincidence?
They're not specifically designed for the mortgage cliff, but the timing works. The government revised the stage three package, and it puts money back in people's pockets. For someone earning under $100,000, that's $2,179 a year. It's not enough to cover the full increase, but it helps.
What worries you most about this situation?
Hyman says the full toll hasn't been seen yet. We're through the bulk of the transition, but there's still uncertainty. If unemployment rises or if rates stay high longer than expected, that buffer disappears fast.
Why aren't we seeing more defaults if people are struggling this much?
That's the surprising part. Delinquencies are still low. People are managing—cutting back elsewhere, drawing on savings, adjusting. But that's not sustainable forever. The tax cuts help, but they're temporary relief, not a solution.
So what happens next?
We watch the data. If delinquencies stay low through 2024, it means most households found a way through. If they spike, we'll know the cliff was steeper than anyone thought.