One-quarter of homeowners could be spending 30% of their income on loans by late-2023, RBA says

Lower-income earners are more likely to struggle with rising interest rates over the next 12 months, the Reserve Bank of Australia says. Photograph: Anthony Devlin/PA

The Reserve Bank of Australia says more than a quarter of mortgage holders will be spending at least 30% of their income to repay debt if the central bank’s key interest rate peaks at the level expected by investors in mid-2023.

The RBA’s semi-annual financial stability review, released on Friday, found Australian households, firms and banks were “entering this more challenging environment in a strong financial position”, as interest rates rose and global economic headwinds strengthened. Strains, though, were unevenly felt and would likely intensify.