Treasurer Chalmers agrees to push banks to respond to mortgage stress

Speaking on Sunrise, Chalmers said banks had a key role to play in helping property owners manage the financial burden of their home loans through the cost-of-living crisis.

Mr Chalmers encouraged any mortgage holders feeling that their loan was becoming unmanageable to speak to their lender to learn about available options.

When challenged on this with comments that the public do not feel that lenders are responding with appropriate solutions to mortgage stress, Mr Chalmers said he would look to speak to banks further this week.

“I have got meetings with each of the major banks this week and I am prepared to raise that with them once again,” he said. “I think they do know that lot of their customers are under pressure.”

While headline and core inflation are both on the way down, the Reserve Bank of Australia has yet to respond with a correlated interest rate cut.

“We know people are still under pressure,” Mr Chalmers said. “We have all got a role to play to ease the pressure where we can, including the government and including the banks.”

The Reserve Bank of Australia's last decision on interest rates for the year will come on 10 December. Picture: Getty

Rates have been held at a 13-year high of 4.35% for the last 12 months, making it challenging for households to save.

“That buffer that a lot of households were able to build up during the pandemic has now run out for a lot of homes,” REA Group senior economist Anne Flaherty said. “More and more households are starting to fall behind on mortgage repayments and the longer rates stay higher, the more households are being squeezed.”

Ms Flaherty added: “Inflation remains very high, in other words, real wages are still negative for a lot of people. The ability to squirrel away enough of your income to fork out for mortgage repayments is going to get harder.”

Mr Chalmers also reiterated the government’s priorities at a press conference in Canberra this week.

“We try and do the best we can for people, recognising the pretty substantial fiscal constraints that we have and that would be our approach in every budget is to make sure that we're striking the right balance, providing cost-of-living relief, putting downward pressure on inflation, fixing the budget, investing in the future.”