‘The entertainment budget would take a hit’: Homeowners decide which expenses to cut

A homeowner with a mortgage of half a million dollars faces a $65 rise in monthly repayments.As mortgages get more expensive, buyers will likely cut back on discretionary spending.Borrowers are set to run the ruler over their discretionary spending after the Reserve Bank on Tuesday kicked off the first round of interest rate rises in a decade.

About a million homeowners had never experienced an increase in the cash rate before the central bank hiked it by 25 basis points to 0.35 per cent on Tuesday in a bid to combat high inflation. Westpac senior economist Matthew Hassan said although most homeowners expect rate rises, the 25 basis point rise from the RBA was a wake-up call and slightly larger than expected.“We know from our own survey of consumer sentiment that most Australians were expecting rates to move higher over the next year,” he said.

He also warned that housing markets were at the beginning of a correction, as rate rises affected borrowing capacity for buyers. Home borrowers who have had their mortgages for years are better prepared than recent buyers. Many who borrowed when interest rates were higher kept their repayments the same as rates fell.

We can now see that the strong economy has little to do with Morrison Government policies. It was a result of record low interest rates and record debt run-up. As both now hit limits we are left up the creek without a paddle. There's your superior economic managers.

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Newbie homeowners will be hit hardest by the rate hikeMany mortgage holders have built up savings and some breathing space thanks to excess mortgage repayments, but those who entered the property market recently are most vulnerable to higher interest rates. jcollett_money ScottMorrisonMP is already denying any responsibility for todays interestrates spike, blaming Europe, the war in Ukraine and Covid.. so much for “Better economic managers”..auspol AusVotes2022 Elections2022 jcollett_money The foreclosures will begin in a few months. Therein lies the opportunity for rich af ppl like me. Where there is pain there is opportunity. Harsh but true. If not me then someone else so it might as well be me. Don't worry I will be happy to rent them back to them 4 a while. jcollett_money That's what morrison wanted to achieve. He only cares about big business.
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Newbie homeowners will be hit hardest by the rate hikeMany mortgage holders should easily withstand higher interest rates, but those who entered the property market recently are more likely to feel the squeeze jcollett_money | ausecon property RBA | ANALYSIS jcollett_money Borrowers … jcollett_money All the due diligence on their ability to make payments was done in a non-inflationary environment. ‘Real’ cost of living is now +10-15%….. jcollett_money Morrison’s housing tax hike.
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