Salus Private Wealth Logo

Latest News

Australia’s debt service ratio ‘extraordinary’: CBA

The change in the debt service ratio has been ‘extraordinary’, according to the major bank.


The Commonwealth Bank of Australia’s (CBA) latest report into the Australian household sector when compared to other countries has found that Australia’s debt-to-service ratio currently sits at a record high.

The debt servicing ratios are based on the methodology derived from the Bank of International Settlements (BIS), which reflects the share of income used to service debt for households, non-financial corporations, and the total private non-financial sector.

According to CBA head of Australian economics Gareth Aird, the combination of more household indebtedness and a “predominantly floating rate mortgage market” has seen the debt service ratio rise “more swiftly in Australia than in any other region”.

Aird added that the cumulative change in the debt service ratio in Australia since the global co-ordinated tightening cycle began is “extraordinary relative to other jurisdictions”.

“The change in debt service ratios captures the impact of the magnitude of the hit to household finance from monetary policy,” Aird added.

“The change in the debt service ratio in Australia since 2022 dwarfs that of any other major region due to the structure of the mortgage market and directness of the transmission of monetary policy.”

The International Monetary Fund (IMF) reflected on this sentiment as fixed-rate mortgages have gained more global prevalence.

“Our results indicate that monetary policy has greater effects on activity in countries where the share of fixed-rate mortgages is low,” IMF said.

“This is due to home owners seeing their monthly payments rise with monetary policy rates if their mortgage rates adjust.

“By contrast, households with fixed-rate mortgages will not see any immediate difference in their monthly payments when policy rates change.”

Furthermore, the effects of monetary policy were found to be stronger in countries where mortgages are larger compared to home values and in countries where “household debt is high as a share of GB, according to the IMF.

“In such settings, more households will be exposed to changes in mortgage rates, and the effects will be stronger if their debt is higher relative to their assets,” IMF said.

While Australia’s debt levels remain higher than in most major regions, the Reserve Bank of Australia (RBA) found that the majority of borrowers are still able to service repayments on time.

In its Financial Stability Review – March 2024, the RBA noted that although housing and personal loan arrears have increased since late 2022, they still remain below pre-pandemic levels, however, the central bank has noticed a rising share of borrowers requesting temporary hardship arrangements from lenders.

In turn, this has contributed to arrear rates remaining “a little lower” than would have otherwise been the case.

Australia’s banks expect arrears to continue to rise but still remain at historical lows.




Adrian Suljanovic
15 April 2024

Latest News

Louise Laing

Louise founded Salus Private Wealth to offer high quality personal advice to clients who want to work closely with an adviser for the long term. Her philosophy that understanding each individual and their motivations and needs is key to an enduring and successful financial planning relationship is at the heart of the business.

She first engaged the services of a financial adviser herself when she was in her early 20s (long before becoming one) and believes the non-judgemental support and education about her position and options provided at this early stage has allowed her to make confident decisions in different aspects of life since then.

This confidence and positivity in making choices, financial or not, is what she wants to give to her clients.

Superannuation & Retirement

Superannuation is one of the largest and longest duration investments most people in Australia have, making it a critical part of long-term planning even if retirement feels like a distant objective. For those in the lead into retirement, we design strategies so you have peace of mind that when you start to draw on your retirement savings, you have liquidity and stability to support that.

Legislation and rules are changed regularly, so advice can help you take advantage of opportunities to build for the future. We are authorised to provide advice on and to SMSFs.

Contact us today to discuss how we can work together: (02) 8044 3057 or email us at


Protecting your wealth, lifestyle and family is high on the priority list for many clients and this is an area of advice need that can change very quickly. Ensuring you have the cover you need can give peace of mind that what’s important is taken care of in the event of illness, injury and death, but we also make sure over time you are not paying for cover you no longer need.

Contact us today to discuss how we can work together: (02) 8044 3057 or email us at

Estate Planning

While talking about death doesn’t seem like a particularly appealing prospect, it’s a topic we see as a vital part of financial planning. Importantly, it’s a topic for every adult, regardless of their stage in life. Without a proper estate plan assets may not be passed where you’d like them to go, family conflict can ensue, and in the event you lose capacity there may not be an authority in place for the person you would choose to make those decisions for you to do so. While it can be an uncomfortable subject, we are experienced in facilitating these conversations as part of our advice process.

Contact us today to discuss how we can work together: (02) 8044 3057 or email us at

Strategic Debt & Cashflow

Managing debt efficiently can have a material impact on your financial wellbeing and lifestyle. Having a solid plan to understand where your money goes and manage cashflow and debt can eliminate stress and set you on a positive path toward achieving your goals.

Contact us today to discuss how we can work together: (02) 8044 3057 or email us at


Once we have a clear understanding of what we are aiming for and how you feel about taking on investment risk, we can help direct your funds into appropriate investments to meet your goals. This includes recommending the investment structure, consideration of tax implications, asset types, and putting together a suitable blend for you. You will have transparency of and access to view your investments, providing security.

Contact us today to discuss how we can work together: (02) 8044 3057 or email us at

Aged Care

Aged care needs can arise suddenly. The complexity of managing this can be a significant challenge at a time when your focus should be on the person requiring care. We can assess the alternative funding options to ensure you make an informed choice in the best interests of the person requiring care.

Contact us today to discuss how we can work together: (02) 8044 3057 or email us at

Tax Diary

General Calculators


Financial Videos

Secure File Transfer

Secure File Transfer is a facility that allows the safe and secure exchange of confidential files or documents between you and us.

Email is very convenient in our business world, there is no doubting that. However email messages and attachments can be intercepted by third parties, putting your privacy and identity at risk if used to send confidential files or documents. Secure File Transfer eliminates this risk.

Login to Secure File Transfer, or contact us if you require a username and password.

General Disclaimer

Website Disclaimer

The Trustee for Laing Weaver Family Trust T/A Salus Private Wealth (Corporate Authorised Representative No. 1305571) and all our advisers are Authorised Representatives of Sambe Investments Pty Ltd T/A Finchley & Kent, Australian Financial Services Licence No. 478766, ABN 67 078 995 856, and has its registered office at Three International Towers, Level 24, Tower 3, 300 Barangaroo Avenue.

Sambe Investments Pty Ltd Australian Financial Services Licence applies to financial products only. Please note that Property Investment, Tax & Accounting, Mortgages & Finance are not considered to be financial products.

Disclaimer: The information contained within the website is of a general nature only. Whilst every care has been taken to ensure the accuracy of the material, The Trustee for Laing Weaver Family Trust T/A Salus Private Wealth and Sambe Investments Pty Ltd T/A Finchley & Kent will not bear responsibility or liability for any action taken by any person, persons or organisation on the purported basis of information contained herein. Without limiting the generality of the foregoing, no person, persons or organisation should invest monies or take action on reliance of the material contained herein but instead should satisfy themselves independently of the appropriateness of such action.