Australia

Philp Lowe, Governor of Reserve Bank of Australia, apologizes to Australian home borrowers

Reserve Bank chief APOLOGIZES to Australians who took out mortgages after he promised not to raise rates until 2024, but instead hit them with massive hikes.

  • Reserve Bank Governor Philip Lowe apologized to borrowers

Reserve Bank Governor Philip Lowe has apologized to borrowers who took out mortgages expecting interest rates to stay at a record low of 0.1 percent.

“I’m certainly sorry if people listened to what we said and acted on what we said and now regret what they did,” he told a Senate economics hearing on Monday.

“That’s unfortunate and I’m sorry it happened.”

Reserve Bank Governor Philip Lowe has apologized to borrowers who applied for a mortgage expecting interest rates to hold at a record low of 0.1 percent.

Last year, Dr. Lowe repeatedly promised that the cash rate would stay at 0.1 percent until 2024 “at the earliest,” but since May, borrowers have faced seven consecutive interest rate hikes.

The cash rate is now at a nine-year high of 2.85 percent and economists expect another 0.25 percentage point rate hike in December.

A borrower with an average mortgage of $600,000 has seen his monthly payments skyrocket by $839 in just six months, to $3,145.

The 7.3 percent inflation rate is more than double the RBA’s 2 to 3 percent target and was expected to remain outside that range until 2025.

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Jacky

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