SYDNEY, Dec 20 Reuters The postpandemic slump in Australian housing is set to deepen next year as hundreds of billions of dollars of mortgage debt fixed at record low rates in 2020 and 2021 mature, forcing borrowers to refinance at punishingly high interest rates.

Repayments on an estimated A370 billion 245.79 billion of home loans could spike by as much as twothirds at a time when real incomes are already shrinking due to surging inflation, dealing a body blow to house prices and the economy39;s main engine of growth consumer spending.

Home values in Sydney have fallen 12 so far this year and Eliza Owen, head of Australian research at property consultant CoreLogic, expects further losses as more distressed properties are listed for sale.

While most borrowers are expected to be able to continue servicing their mortgages, there could be more motivated selling, if mortgage arrears rise from record lows, said Owen.

Homeowner Francesca Lemon knows the pain repayments on her variablerate mortgage have already risen by A1,200 per month this year, forcing her back to work despite a longterm medical condition so that her family can keep up with debt.

It39;s very frustrating and people are already struggling to survive. The cost of paying your mortgage is literally going up for everyone by thousands of dollars, said the 31yearold Lemon.

Australia39;s big four banks Commonwealth Bank of Australia, Westpac, National Australia Bank and ANZ  account for 75 of the…