Revenue Idea No 2654 – a levy on mortgages

Dr Cullen is floating the idea of a levy on fixed rate mortgages. The rationale is because fixed rate mortgages don’t respond to interest rate changes by the Reserve Bank, and hence monetary policy is less effective.

But funny how every-time there is a problem, the solution involves Dr Cullen taking more of our money off us. Even more ironic because one of the causes of the high inflation we have is that Dr Cullen is spending too much of our money.

Anyway the entire reason people go for fixed rate mortgages is because they want or need some certainty with their expenses. As Tony Alexander correctly points out, having the Govt impose a levy on fixed rate mortgages at whim would destroy the market for them. Everyone would be forced onto floating rate.