How does Australia compare to the rest of the world?
In light of the RBA’s recent cash rate increase, Australian lenders are informing brokers and customers their home loan rates, yet again, will be going up by 0.25% as early as November 17th. For those who don’t follow the news or keep up to date with the financial status of the country, Australians must be thinking “we can’t be the only ones, can we?”.
In this short blog, I’ve tried to summarise the interest rate health of Australia and how we compare to other countries around the world. According to World Data, in 2022 Australia ranked 14th in the world for cost of living affordability (1st Bermuda is the most expensive).
Countries such as Switzerland (3rd), Ireland (8th) and Denmark (10th) all being ahead of us. Whereas, the United States (17th), United Kingdom (18th) and Thailand (76th) are all much less expensive to live in. When we dive deeper and make this relatable to the business of My Mortgage Freedom, it is very interesting to see how the interest rates and mortgage repayments have an inverse response to the ‘cost of living’ metric.
If you take Australia’s average loan size of $590,000AUD and put it up against a variable, principal and interest, Owner Occupied rate of 5.89%, the repayments over 30years are $3,496 per month. Let’s compare this to the rest of the world...
Looking at how we sit compared to the rest of the world will hopefully give you some clarity and comfort around your current home loan. Even though it is cheaper to live in countries like US and UK, the mortgage repayments are way higher. And countries where it should be more expensive, mortgage repayments are lower. We aren’t paying too much, or too little. You could consider us to be the ‘Goldilocks’ of the global mortgage market.
If you have any further questions or queries, we’ll be happy to help you get the best “Australian” rate possible.