The peak of fixed-rate home loan maturities will be in the December half of this year but a large volume of maturities will continue into 2025.
To date, there has been little evidence of mortgage delinquency induced by rising interest rates but all eyes are on the “fixed-rate cliff”, when borrowers who got cheap fixed-rate loans in 2020 and 2021 convert to more expensive variable-rate loans.
Macquarie Securities calculated the fixed-rate loan maturities of the major banks over the next few years and found most of the impact will be felt this year.
According to Macquarie, A$89 billion of fixed-rate loans matured during the six months to December last year. Maturities will rise to $131 billion in the June half this year and $144 billion in the December half.
During that peak period, $51 billion of Commonwealth Bank fixed-rate loans will mature, $45 billion of Westpac loans, $27 billion of NAB loans and $21 billion of ANZ loans.
The volume of maturities will taper off in 2024, with Macquarie calculating that maturities will be $91 billion in the first half of the year and $66 billion in the December half.
Expectations are that interest rates will start to come down later this year or early next year, so the impact of rolling over from a fixed-rate to a variable-rate loan will not be so marked.
Maturities will be down to $55 billion in the first half of 2025.