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Most Australians can cope with higher interest rates, because they are already paying above their rate, MFAA chief executive Phil Naylor has said.
According to Mr Naylor, most lenders factored in interest rate rises when deciding whether to grant a loan.
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“At the moment people are still pretty well covered,” Mr Naylor told The Australian Financial review.
“Lenders generally have factored in about a 2 per cent increase in rates so we’re still within that.”
Mr Naylor said a lot of Australians had managed to keep a buffer by paying more than their required monthly repayments since interest rates began to fall last year.
The Reserve Bank’s deputy governor Ric Battellino agreed that the latest rate hike was not of great concern as homeowners are particularly active in paying down their loans.
“The faster pay-down of mortgage debt in Australia reduces the risk of borrowers subsequently getting into financial difficulty,” Mr Battellino said in a speech last week.
