Higher interest rates are squeezing borrowers without subduing inflation
As the RBA's rate rises push up mortgage repayments and add pressure to property prices, questions are growing over whether Australia's approach to controlling inflation is placing too much of the burden on borrowers.
Higher mortgage repayments are adding to financial pressure on property owners as falling values and weaker sales activity reshape the housing market. (Image source: Shutterstock.com)
Interest rates increased again last month. They may do so again
next month. But there’s something of a self-propagating conundrum in the Reserve Bank using the blunt instrument of interest rate increases to control inflation.Higher rates single out mortgage holders. It is people with loans who exclusively feel the burden. People who own property, having paid off their loan, can spend more freely. They are not targeted by higher interest rates. I…
