{"id":560638,"date":"2026-03-24T07:33:15","date_gmt":"2026-03-24T07:33:15","guid":{"rendered":"https:\/\/www.newsbeep.com\/au\/560638\/"},"modified":"2026-03-24T07:33:15","modified_gmt":"2026-03-24T07:33:15","slug":"5-deposit-fhbs-brace-for-interest-rate-rises","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/au\/560638\/","title":{"rendered":"5% deposit FHBs brace for interest rate rises"},"content":{"rendered":"<p>The Reserve Bank of Australia\u2019s (RBA) latest Financial Stability Review reported a sharp increase in high-loan-to-value-ratio (LVR) mortgage lending to first home buyers following the introduction of the expanded 5% deposit scheme on 1 October 2025.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2026\/03\/FHB-LVRs.png\" width=\"643\" height=\"652\" alt=\"FHB LVRs\"\/><\/p>\n<p>The latest pricing from financial markets suggests that the RBA will raise the official cash rate a further three times this year, bringing it to a 16-year high of 4.85%.<\/p>\n<p><img src=\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2026\/03\/RBA-cash-rate-forecast-2.png\" width=\"577\" height=\"457\" decoding=\"async\" loading=\"lazy\" alt=\"RBA cash rate expectations\"\/><\/p>\n<p>Advertisement<\/p>\n<p>Recent first home buyers will be hoping that the market pricing of the RBA cash rate has overshot.<\/p>\n<p>The average size of a new first home buyer mortgage was $607,500 in the December quarter of 2025.<\/p>\n<p>Five 0.25% interest rate hikes over 2026 imply an increase in the discount variable mortgage rate from 5.50% to 6.75% and an increase in average monthly first home buyer mortgage repayments of $491:<\/p>\n<p>Advertisement<\/p>\n<p><img src=\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2026\/03\/FHB-mortgage-repayments.png\" width=\"660\" height=\"180\" decoding=\"async\" loading=\"lazy\" alt=\"Increase in FHB mortgage repayments\"\/><\/p>\n<p>For those borrowing at 95% LVR under the 5% deposit scheme, the impact on monthly repayments is likely to be even greater.<\/p>\n<p>The bigger risk is that the impact of the RBA\u2019s monetary tightening coincides with a jump in the unemployment rate amid a recession driven by the global energy shock and tightening financial conditions.<\/p>\n<p>Advertisement<\/p>\n<p>Unfortunately, the Albanese government\u2019s expanded 5% deposit scheme arrived just prior to the RBA\u2019s tightening cycle and the war in the Middle East. Neither scenario was envisioned when the policy took effect in October 2025.<\/p>\n<p>Now, recent Australian first home buyers are facing the real prospect of severe rises in mortgage repayments, unemployment, mortgage stress, and potential negative equity as house prices fall.<\/p>\n<p>Federal government policy has literally pulled vulnerable first home buyers into the market at the worst possible time.<\/p>\n<p>Advertisement<\/p>\n","protected":false},"excerpt":{"rendered":"The Reserve Bank of Australia\u2019s (RBA) latest Financial Stability Review reported a sharp increase in high-loan-to-value-ratio (LVR) mortgage&hellip;\n","protected":false},"author":2,"featured_media":553419,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[64,63,99,164],"class_list":["post-560638","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-au","tag-australia","tag-business","tag-economy"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/560638","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=560638"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/560638\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/553419"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=560638"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=560638"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=560638"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}