Homeowners have been warned to brace for another three rate rises by National Australia Bank CEO Ross McEwan, with the first to come as soon as next week.
In a grim warning to families, the big bank boss has predicted that the number of people experiencing mortgage stress is likely to grow.
He urged those who are struggling to talk to the bank as soon as possible if they are falling behind.
The bank concedes that four in ten people are now experiencing financial difficulty, and one in three identified money as a significant form of stress.
“We’re now starting to see that households are starting to feel the pressure of not just interest rates going up but also power bills, the grocery bills, everything’s moving up,’’ he told ABC Radio National.
Those experiencing mortgage stress are urged to contact their bank ASAP. Picture: NCA NewsWire/Gaye Gerard
“That’s why the Reserve Bank has to stem the inflation play that we have at the moment and the tools they have as interest rate rises.
“So I think we’re in for another at least two, possibly three more interest rate rises over the next six months.”
The NAB CEO urged those who are struggling to seek help and return the bank’s phone calls if they get in touch.
“The first thing is that when people ring our hardship team or email, within 90 days 90 per cent of them are back (on track) actually, in a good, good shape,’’ he said.
“If you’re having difficulty, make the call or get online early. Don’t leave it too long. There are things that the NAB team can do to help.
“But please make the call early.”
RBA governor Philip Lowe is facing increasing backlash over the aggressive rate hikes. Picture: NCA NewsWire/Gary Ramage
In some good news, he predicted Australia would avoid a recession.
“I actually still am confident we’re going to avoid a recession,’’ he said.
Both Commonwealth Bank and NAB announced on Wednesday they had hiked select rates for new customers
“I think it shows that the rates aren’t always related to the RBA,’’ the NAB CEO said.
“The RBA is one factor that we’ve put into our rates. Secondly, the other thing that affects how we spend where we put our rates is the risk profile of customers.”
In some good news for Treasurer Jim Chalmers, the NAB CEO said the super changes being proposed for balances over $3 million was reasonable.
“Actually, I think … three million’s a lot of money to have in a super fund,’’ he said.
But he suggested the government consider indexing the $3 million threshold.
Sunrise host lashed for super tax interviewSign Australia is ‘teetering’ on disasterNAB CEO Ross McEwan says more pain is on the way. Picture: NCA NewsWire/David Crosling
“I think that’s something that the government could look at,’’ he said.
“But let’s consider, it didn’t affect 99.5 per cent of Australians, it affected a small group of people who had a huge amount of money [in] those funds, I’m sure they’ll find other things to put their money in.”