Repayments rise with rates
NORTHERN Rivers homeowners face increased mortgage payments in coming weeks after interest rates were lifted yesterday.
At its monthly meeting, the Reserve Bank of Australia board increased rates by .25 per cent, taking the official cash rate to 4.25 per cent.
The increase is expected to add about $48 a month to rep-ayments on an average mortgage of $300,000, assumingretail banks match the move.
Yesterday’s increase is the fifth since October last year, when the Reserve first began to change course on interest rates after slashing them during the global financial crisis.
Rates plummeted fromseven per cent in early 2008 to just three per cent little more than a year later.
But while interest rates are still being below average, it is expected the latest rise will cause some grief for highly geared borrowers.
Professor Lawson Savery, from Southern Cross University in Lismore, said Northern Rivers borrowers would not be spared from yesterday’sincrease.
“It will affect the North Coast quite badly,” he said.
Professor Savery said the problem for people on the North Coast was that rate rises applied to the whole economy, despite different conditions prevailing in different areas.
“(Reserve Governor) Glenn Stevens is worried about a housing bubble, but we don’t have that here,” he said.
Professor Savery predicted interest rates will increase three more times to five per cent by the end of the year.
Meanwhile, a report rel-eased yesterday by debt assistance company Debt Rescue revealed financial pressure is having negative emotional and psychological impacts on some borrowers.
The report claimed two in three people surveyed said their debt levels had caused them depression or anxiety, while more than half said their problems had a negative impact on their relationships.