Australian Banks

Home ownership is a cultural icon in Australia - 70 per cent of households own their own home. Most of us aspire to a detached house on a fenced block of land - we've grown up with it and our children expect the same for themselves. But coping with a hefty mortgage can be very stressful and some couples have given up in despair.

I personally know a young couple who bought a townhouse in Sydney for $320,000. The banks insist on a minimum of 10 per cent deposit and they only had 5 per cent which included the first homeowner's grant of $7,000 from the government. But they hunted around and found a broker who was prepared to give them the loan at a reasonable rate but they have to repay $475 a week - nearly $1900 a month, every month, for a very, very long time.

Last week another big bank announced massive increase in profit figures and everyone is so furious at being ripped off, politicians are making vague noises about pulling them into line but we know nothing will come of it because greed is good and keeping the shareholders happy is paramount. Profit is the name of the game. The Commonwealth Bank raised its lending rate to almost double the official move by the Reserve Bank last week and the CBA's standard variable mortgage rate now stands at 7.81%. The Research Institute for Housing America found that since 2001, Australian mortgage rates had been above those of the rest of the developed world.

We now find out that mortgage rates in other countries declined over the past 10 years, except in Australia. So as usual, we are paying through the neck for something that the rest of the world gets for half the price.