Interest rates and housing

The rate is the wind. The principal is the anchor.

Everyone remembers the 17% mortgage rates of 1989–90. Almost nobody remembers that, across all households, they took a smaller share of income than the 6% of 2026 — because the debt behind them was a quarter the size relative to income. A rate rise changes what you pay this month. The size of the loan decides how many years you are tied to it.

1990 interest, all households
4.4%

at a 17.0% mortgage rate

2026 interest, all households
6.2%

at a 6.2% mortgage rate

Owner-occupier debt, share of income
26% → 100%

the anchor, quadrupled

Across all households, a 17% mortgage rate took a smaller share of income than a 6% one

The dearest quarter in this series is Mar 1990, when banks charged 17.0% on a home loan. Owner-occupier housing debt was only 26% of what households earned after tax, so all that interest took 4.4% of household income. By Jun 2026 the rate had fallen to 6.2% — about a third — but the debt had grown to 100% of income, and the interest bill now takes 6.2%.

Both figures are spread across every household in the country, including the nearly two thirds with no mortgage, and they count interest only. That is why they look small next to what one borrower hands over each month. The comparison between the two years is what matters, not the level.

Housing interest, share of all households' disposable income

Quarterly, 1990–2026. RBA E2 owner-occupier housing debt to income × the prevailing mortgage rate.

Mar 1990
4.4%
Peak · Jun 2008
7.1%
Jun 2026
6.2%
Rate then vs now
17.0% → 6.2%
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The heaviest quarter on record is Jun 2008, at 7.1% — not 1990. Getting there took a mortgage rate of only 8.8% against housing debt of 80% of income. The dashed grey band is the RBA cash rate, which is not what borrowers pay: in Jun 2026 it sat at 4.35% while the average rate on outstanding owner-occupier loans was 6.2%.

Buy the median home in any year since 2004

The price, the interest rate and the wage growth below are real, published figures for the year you pick. The deposit, the loan term and the income are yours to set — so what comes out is a scenario, not a claim about the average household.

Your repayment, in the year you chose

ABS median house price and the RBA mortgage rate for that year

Median house price
$1,515,375
Amount borrowed
$1,212,300
Mortgage rate
5.76%
Monthly repayment
$7,081
2025
20042025
Dwelling

ABS unstratified median for the greater capital city — the middle sale, not an index

Your number, not a published statistic. Scaled back to 2025 with the ABS Wage Price Index: $146,371

Deposit
Loan term

Estimate only. Uses median prices and average mortgage rates, not your loan, lender or tax position. General information, not financial advice.

58.1% of the $146,371 your household would have earned in 2025 would go to the loan — $84,973 a year. That is past 30% of after-tax income. The usual 30% mortgage-stress rule is measured against pre-tax income, so this is a stricter test.

For contrast, the average new owner-occupier loan written in New South Wales in 2025 was $831,312 — less than the $1,212,300 modelled here.

In today’s money that is a $1,575,109 home and a $7,360 monthly repayment.

Rate basis: Average rate on outstanding loans. The RBA cash rate that year averaged 3.88% — shown only for contrast; no repayment here is computed from it.

What rate would break this loan?

Hold the $1,212,300 you borrowed in 2025 fixed, then move the interest rate. The sweep runs to 18% because the RBA’s own table records banks charging 17% on a home loan in January 1990 — a chart that stopped at 10% would imply that cannot happen again.

A $1,212,300 loan over 30 years

Against the $146,371 your household would have earned in 2025

Rate used, 2025
5.76%
Share of income
58.1%
Hits 30% at
already past
At rate + 3%
78.2%
Loading chart…

Estimate only. Uses median prices and average mortgage rates, not your loan, lender or tax position. General information, not financial advice.

This household is already past 30% of income at the 5.76% used for 2025, so there is no rate rise left to find — the line is behind it, not ahead. APRA expects lenders to test borrowers at least 3 percentage points above the loan rate, which here means 8.76% and a repayment of $9,537 a month. That buffer has been 3 points since October 2021; it was at least 2.5 points from July 2019, and before that APRA expected a buffer of at least 2 points and a minimum 7% floor rate. Today’s rule is applied to every year here.

the rate is the wind, the principal is the anchor

Two households can hand over the same share of their income and be in completely different positions. The 1990 borrower was paying a punishing rate on a small balance, and five years of wage growth shrank what was left to repay. The 2026 borrower is paying a mild rate on a balance four times larger as a share of income, and no plausible run of pay rises will do the same work. Watching the cash rate tells you what changes this month. The size of the loan tells you how long you are tied to it.

Where every number on this page comes from

No figure here is estimated. Each series is a direct pull from a published table, last refreshed on 2026-10-04. The page then takes annual means and splices three mortgage-rate measures, as described below.

Sources

Publisher, table and series identifier

Four things to know

The cash rate is not the mortgage rate. In August 1990, the first month the RBA’s cash rate target series covers, the cash rate was 14.00% and the standard variable housing rate 16.38% — a gap of 2.4 points. In August 2026 the gap was 4.4 points: the cash rate was 4.35%, the advertised standard variable rate was 8.77%, and the average rate people actually paid on an existing owner-occupier loan was 6.20%. The RBA raised the cash rate to 4.60% on 30 September 2026, after this data was last refreshed. This page uses the most representative published measure for each month and names it wherever a repayment is shown.

Prices are unstratified medians. The ABS figure is the middle sale price among every established house, or every attached dwelling, that changed hands in the greater capital city that quarter. It is not adjusted for what sold: a quarter with more cheap sales reads as a fall. The page works in annual means of the quarterly medians, which smooths most of that out.

The income you enter is scaled back with wages, not prices. One figure has to describe the same household in every year, so it is treated as today’s dollars and scaled to the purchase year with the ABS Wage Price Index. CPI would be the wrong deflator here: what a repayment competes with is the pay packet, not the grocery bill.

The time machine starts in 2004, the burden line in 1990. The ABS medians begin in 2002 for houses and 2003 for units, so this ABS series has no capital-city price for the 1990s to model a purchase against. The interest-burden series needs no price at all — it is two published ratios multiplied together — which is why the 1990s comparison is made there and not here.

General information only. It does not account for your circumstances and is not financial or tax advice.