SYDNEY, July 13 Reuters The CEOs of Australia39;s two biggest banks said on Thursday a tight labour market was keeping late home loan repayments below historic levels even after a year of rising interest rates, but warned that living costs would squeeze the economy through 2023.

The updates from Commonwealth Bank of Australia and Westpac gave a sense that the A2 trillion 1.4 trillion mortgage market, a bedrock of the world39;s thirteenth largest economy, may avoid a downturn that economists feared when the central bank began raising rates in May last year.

In two days of parliamentary hearings that bank CEOs must attend periodically, the lenders and rivals National Australia Bank and ANZ Group gave nearidentical takes that 400 basis points of rate increases had barely changed ontime loan repayments but households would face more financial stress.

Economists had warned the expiry of one million fixedrate mortgages to roll into higher variable rates from 2023 would leave people unable to make payments, a scenario referred to as a mortgage cliff. But halfway into that transition, all four banks reported little impact, citing recordlow 3.5 unemployment.

We39;re bulking up the teams that take the calls from customers when they need the help but we haven39;t seen the increase, said Peter King, CEO of number two bank Westpac.

The vast majority of people are in good shape but I don39;t think it will stay like that for the rest of the year. Employment is probably the…