Workers feel mortgage, insurance pain as inflation and interest rates rise

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Workers feel mortgage, insurance pain as inflation and interest rates rise | rachelclun

The rising costs of mortgages, groceries and insurance are squeezing workers and putting some households under increasing financial stress as they face growing inflation and the Reserve Bank’s continued interest rate rises.

Worker households experienced a 6.7 per cent increase in living costs, driven mainly by mortgage interest charges increasing as the Reserve Bank lifted rates. The bank has lifted the official cash rate from 0.1 per centHead of price statistics at the ABS Michelle Marquardt said the effect of price changes varies between household types because they spend differently, but some cost increases were felt across all groups.

“We know that inflation limits our aspirations: it erodes the purchasing power of take-home pay, it reduces the value of hard-earned savings, it corrodes the real return on investment,” he said. Those pressures are being felt in the home lending sector. Separate ABS data showed the value of new owner-occupier loans fell by 9.3 per cent in September, to $25.1 billion, while new investor loans also fell by 6 per cent. The number of first home buyer owner-occupier loans also fell by 8.3 per cent in September, after rising by 10.4 per cent in August.

 

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