What's needed in Australia, are banks or lending institutions that can offer borrowers a 20 or 30 year fixed interest rate loan.
That would take the uncertainty out of the equation for many mortgage holders and who would no longer be held hostage to any RBA future rate increases, using the only blunt tool they have to curb inflation.
The maximum fixed interest rate loan period currently on offer in Australia is 10 years from the ANZ, RAMS, and two others.
In the USA, many borrowers are on 30-year fixed interest rate loans.
Yes, they are more expensive (currently) than variable rates... But over the course of 30 years, you may break even in the long term, especially if interest rates ever go back to the high rates we saw in the 80's and early 90's. (never say never).
In the US, you can even re-finance your 30 year fixed home loan to another loan, if interest rates drop... So you are not locked in for "life".
Australia’s mortgage market is unlike almost any other in the world, boasting one of the highest rates of variable interest loans.
Maybe more American banking institutions that offer home loans need to open up shop here.
Over 4,400 banks (not branches) in the USA versus our big 4 plus another 93 or so. (Yes, the US population is magnitudes greater than Oz, but still more banks in the US per capita if you do the sums).
Competition is good for consumers.
Would you buy a $100,000 plus car on a variable interest rate car loan?
Probably not.
Food for thought.