{"id":712087,"date":"2026-06-03T07:27:17","date_gmt":"2026-06-03T07:27:17","guid":{"rendered":"https:\/\/www.newsbeep.com\/au\/712087\/"},"modified":"2026-06-03T07:27:17","modified_gmt":"2026-06-03T07:27:17","slug":"calls-for-radical-two-tier-mortgage-system-to-help-australian-homeowners","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/au\/712087\/","title":{"rendered":"Calls for radical two-tier mortgage system to help Australian homeowners"},"content":{"rendered":"

In less than two weeks, the Reserve Bank will once again gather around its boardroom table to decide whether Australians can afford another interest rate hike.<\/p>\n

If rates go up by another 25 basis points, it will be the fourth increase this year, taking the cash rate to 4.6 per cent.<\/p>\n

For many homeowners, that won\u2019t just be another economic headline. It\u2019ll be another punch to the wallet.<\/p>\n

The average mortgage repayment has already increased by around $239 a month on a $500,000 variable loan, $287 on a $600,000 loan and $358 on a $750,000 loan.<\/p>\n

And if you\u2019re renting? Don\u2019t kid yourself. Those higher repayments have a habit of finding their way to tenants eventually too.<\/p>\n

MORE NEWS<\/p>\n

Exposed: Diggers slugged $100k \u2018tax on service\u2019 for home loans<\/a><\/p>\n

Tradie reveals shocking barrier to housing crisis fix<\/a><\/p>\n

Can\u2019t afford a home? It\u2019s your own fault<\/a><\/p>\n

Personally, I\u2019m exhausted and, quite frankly, it\u2019s f**ked.<\/p>\n

I\u2019m tired of having to reshuffle money every month because another bill has gone up.<\/p>\n

I\u2019m tired of opening emails from my bank wondering whether this will be the one informing me my mortgage repayment is about to climb again.<\/p>\n

I\u2019m tired of paying more for groceries, more for petrol, more for insurance and more for electricity.<\/p>\n

\"\"\/<\/p>\n

If we\u2019re serious about helping everyday Australians not only buy homes but actually keep them, why are we still treating every mortgage holder exactly the same?<\/p>\n

Why not make mortgages work a little bit more like tax?<\/p>\n

Before you start angrily typing, hear me out.<\/p>\n

Australia already accepts the principle that people who earn more should contribute more.<\/p>\n

That\u2019s the foundation of our tax system.<\/p>\n

The more you earn, the more tax you generally pay.<\/p>\n

Yet when it comes to mortgages, the single biggest household expense most Australians will ever have, a nurse and a mining executive can be hit with exactly the same rate rise.<\/p>\n

Sure, their loan sizes may differ.<\/p>\n

But the impact of a rate increase isn\u2019t felt equally.<\/p>\n

A household earning $90,000 a year and a household earning $250,000 a year are living in completely different financial universes.<\/p>\n

MORE NEWS: Aus investor profits from homes most buyers won\u2019t touch<\/a><\/p>\n

\"Saturday<\/p>\n

New research from Money.com.au reveals 51 per cent of Australians would support income-based mortgage pricing \u2013 a model where lower-income earners could access discounted home loan rates, either directly through lenders or via government subsidies similar to existing housing affordability schemes. Picture: Sam Ruttyn<\/p>\n

One unexpected bill can derail the first family for months.<\/p>\n

The second family might not even notice.<\/p>\n

So here\u2019s my admittedly radical thought.<\/p>\n

What if Australia introduced income-tested mortgages?<\/p>\n

What if lower-income households qualified for lower home loan rates, while higher-income households paid slightly more?<\/p>\n

Not dramatically more.<\/p>\n

But enough to help keep lower-income Aussies in their homes when rates inevitably rise.<\/p>\n

Currently, the average full-time salary in Australia sits at around $106,650 a year, while the median full-time wage is closer to $90,500.<\/p>\n

Under a model like this, households below a certain income threshold could receive discounted mortgage rates, either directly through lenders or via government-backed subsidies.<\/p>\n

To test whether I was completely losing my mind, I asked Money.com.au<\/a> to survey Australians.<\/p>\n

Turns out I\u2019m not alone.<\/p>\n

\"\"\/<\/p>\n

More than half of Australians \u2013 51 per cent \u2013 said they would support income-based mortgage pricing.<\/p>\n

Support was strongest among younger Australians, with 68 per cent of Gen Z and 58 per cent of Millennials backing the concept.<\/p>\n

Older Australians were less enthusiastic.<\/p>\n

Which, if we\u2019re being honest, probably won\u2019t surprise anybody.<\/p>\n

When asked where the income cut-off should sit, homeowners suggested an average annual household income threshold of $115,000.<\/p>\n

Younger Australians pushed that figure higher, arguing households earning up to $125,000 should still qualify for discounted rates.<\/p>\n

Money.com.au mortgage expert Nick Burgess says the findings raise an interesting question about whether alternative lending models could help tackle growing intergenerational inequality.<\/p>\n

\u201cYounger Australians face higher property prices, larger deposit hurdles and tougher pathways into home ownership than previous generations,\u201d he says.<\/p>\n

\u201cThey\u2019re also more likely to feel the squeeze from interest rate rises.\u201d<\/p>\n

One possible model, he suggests, could see households earning under $115,000 receive a subsidised mortgage rate of five per cent.<\/p>\n

The rate could then rise by 0.25 percentage points for every additional $10,000 in household income.<\/p>\n

It\u2019s not perfect.<\/p>\n

Nothing is.<\/p>\n

But at least it\u2019s an attempt to acknowledge a reality politicians seem reluctant to confront.<\/p>\n

Not every borrower experiences financial pain equally.<\/p>\n

\"Supplied<\/p>\n

Compare the Market economic director David Koch.<\/p>\n

Compare the Market economic director David \u201cKochie\u201d Koch agrees the concept isn\u2019t completely outlandish.<\/p>\n

\u201cThe idea of income-based support for low income and first home borrowers isn\u2019t completely untested. Hungary and Poland both offer subsidies for lower-income borrowers,\u201d he says.<\/p>\n

\u201cPoland offers a fixed mortgage rate of around 2 per cent for up to ten years for eligible borrowers. The Government then pays the lender the difference to the market rate.\u201d<\/p>\n

As for Australia, Kochie says the RBA has just two immediate jobs: keep unemployment and inflation low and one main lever \u2026 interest rates. <\/p>\n

I\u2019m not suggesting the Reserve Bank should means-test interest rates.<\/p>\n

That isn\u2019t its job.<\/p>\n

As Koch points out, the RBA has one primary weapon in its fight against inflation: Interest rates.<\/p>\n

The government, however, has far more tools available.<\/p>\n

The real question is whether we\u2019re willing to think differently about housing.<\/p>\n

Because what we\u2019re doing now clearly isn\u2019t working.<\/p>\n

If the definition of insanity is doing the same thing over and over and expecting a different result, Australia\u2019s housing system is starting to look positively unhinged.<\/p>\n

And for the millions of Australians nervously waiting for the next Reserve Bank decision, that conversation can\u2019t come soon enough.<\/p>\n","protected":false},"excerpt":{"rendered":"In less than two weeks, the Reserve Bank will once again gather around its boardroom table to decide…\n","protected":false},"author":2,"featured_media":712088,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[64,63,99,164],"class_list":["post-712087","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\/712087","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=712087"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/712087\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/712088"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=712087"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=712087"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=712087"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}