Rising interest rates and a long-running cost-of-living squeeze have left mortgage holders struggling, yet the banks are milking more than ever from their home loan customers.
The research reveals that while home buyers tightened their belts last financial year, the banks' profits grew to a massive $43 billion, $16.9 billion of which came straight from owner-occupiers with a mortgage.
Key points:
- While mortgages for owner-occupiers make up 22.7% of the big four banks' loans, they make up 39.3% of their profits - suggesting owner-occupiers disproportionately contribute to the $43 billion in pre-tax profits the big banks recorded last year.
- The average 30-year owner-occupier home loan in Australia is $736,000 and big banks are now receiving $228,900 in profit on such loans.
- The big four banks make $11,110 profit from the average home buyer in the first year of their loan.
- This equates to $929 per month or $214 per week, which new home loan customers contribute to bank profits.
- Lending money to home buyers is almost as profitable as mining in Australia, with the big four banks joining Rio Tinto and BHP in the top six most profitable companies in the nation.
- The Commonwealth Bank is the 11th biggest bank in the world and the biggest company in Australia with a market capitalisation of $292,000,000,000.
"These numbers are obscene. Rising interest rates and rising prices are hurting Australians. But you know who's not hurting and who never hurts? The banks. While so many Australians are going backwards, the banks' profits are only going in one direction - up," said Dr Richard Denniss, co-CEO of The Australia Institute.
"The big four banks made $43 billion last year. They're taking nearly $230,000 in pure profit from an average borrower. In the first year of their mortgage, Australian homeowners are contributing more than $900 a month to their bank's profit.
"Australians are getting smashed at the petrol pump, smashed at the supermarket and smashed on their energy bills, but no other companies make anything close to the profits the big four banks are taking from mortgage holders.
"With the RBA meeting today, borrowers will soon find out if they're about to be squeezed even further. If interest rates go up, Australian families will have to make cuts. Some will lose homes. But the big banks' profits will keep rolling in."
