Latest interest rate hike forces belt-tightening
KYLIE GARRARD, of Lismore, and Kerryn Surwald, of Casino, are homeowners who know yesterday’s 0.25 per cent rate rise by the Reserve Bank will have an adverse impact on their spending habits.
“We’ve had our mortgage for the past 14 to 15 months,” Ms Garrard said. “A large portion is fixed and only a smaller part is variable.
“When the rates went down we kept payments the same, so we are about $10,000 ahead now.
“We will be stretched with the rate rise as I have just gone on maternity leave and am only on half pay for a while.”
With an eight-year-old son and a baby due in five weeks, Ms Garrard believes their spending will be reduced dramatically.
“We won’t be going out to restaurants or have many holidays,” she said. “We’ll have a few more activities at home.”
Ms Garrard estimated that nearly 50pc of their income was going on their mortgage.
Kerryn Surwald, a full-time mum to Lauren, 2, and Ashton, 14 weeks, will also feel the pain.
“We’ve had our mortgage for about a year and a half, but we didn’t fix any part of it,” she said. “We can still manage to save each week, so I feel we’re in a fortunate position.
“We’re extremely budget conscious and we watch what we buy.”
Ms Surwald estimated about 30pc of their income went on mortgage payments.
Both women agreed that while having credit cards was handy, they will watch what they spend on them. They also shared tips on the best time to go shopping that helped them save some money.
“I buy my groceries once a week so I’m not constantly racing up to the store for bits and pieces,” Ms Garrard said. “I also manage to put $15 a week into a Christmas fund so all the money for presents is saved.”
“I don’t go shopping when I’m hungry,” Ms Surwald said. “By watching our spending we also see what is important in relation to our families.”
The official cash rate will jump to 3.5 per cent from today after the Reserve Bank approved an increase of 25 basis points for the second month in a row yesterday.
“Economic conditions in Australia have been stronger than expected and measures of confidence have recovered.” RBA Governor Glenn Stevens said in a statement to the media.
WILL THE RATE RISE AFFECT YOUR SPENDING?
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