RBA Interest Rises- How is it affecting you?

[EvoVIIIJDM]

RBA: Cash Rate Target

As it states all those home owners out there, how are these latest rises affecting you and your mortgage?

Fo myself with a baby on the way (found out im having a son!) and about to buy our first home, these rate rises certainly dont help our cause.

Rudd announces new housing plan to help affordibilty, too little too late?


Readers' Comments: PM combats house price crisis - Herald Sun


With further rises predicted as the RBA tries to slow spending with monetary policy and government also tries to cut back spending through fiscal, what is in store for Australia in terms of inflation?

What are your thoughts JC?

[*VOLATILE*]

RBA: Cash Rate Target

As it states all those home owners out there, how are these latest rises affecting you and your mortgage?

Fo myself with a baby on the way (found out im having a son!) and about to buy our first home, these rate rises certainly dont help our cause.

Rudd announces new housing plan to help affordibilty, too little too late?


Readers' Comments: PM combats house price crisis - Herald Sun


With further rises predicted as the RBA tries to slow spending with monetary policy and government also tries to cut back spending through fiscal, what is in store for Australia in terms of inflation?

What are your thoughts JC?

To start off with, congratulations on the announcement of your baby!!! That's awesome.

Rudd = Too little too late, I think the damage has already been done. I've got a few friends that WERE thinking of buying a home but after me telling them how the interest rates have affected me (2 rate rises = extra $180 a month) and now they are just too scared to do it.

Right now, the rate rise isn't affecting me toooo much but if there are anymore big rises, I will certainly be re-assessing my finances.

[Kikki]

Aww congrats, little Boys rock.

We wont be buying a house anytime soon, no way. Unless we win lotto. And honestly in the next 10 years I don't think we will be able to either. I think its too late.

[MasterOfReality]

I bought a house about 4 months ago.

When borrowing, I factored in a maximum interest rate of 13% before I have to start cutting down on non essential items and looking at ways to save more money.

If the loan interest rates go to double digits and stay there, I will be quitting my current office job in the city to go back out onto site in order to get a $50k increase. The gf is understandably not too happy about that but thats the way it goes.

My parents are loving the rate increases. Retired, zero debts and earn about $1300 a week after tax from their investments. They are considering purchasing their 4th investment property outright if the rates go really high because then they will pick up a bargain. Don't blame them at all.

[minux]

Not affecting me at all, it is only tempting us more and more to buy.

Really at 7.25% it shouldn't be affecting anyone but it goes to show how many people have borrowed on a borderline mortgage. You cannot expect to borrow 400k and hope that interest rates will stay low forever. It just will not happen.

It has been great to see quite a few foreclosure auctions going much cheaper than expected, we looked at a few places last weekend, but still a little high for us to be comfortable. Hopefully we can see rates hit around 8% which will see even more cheaper properties.

Bring on more tax cuts!!!!!

LS1chubby, if i were you I would hold off buying for 12 months. It will save you quite a bit of coin and will also help you get even more of a deposit together. The less you need to borrow for your first home the better off you are for when you buy a second...and third etc etc.

[vicarious]

had rudd started up a commision on this yet

[CSP]

Not affecting me at all.

Looking around at buying another couple of places in the next 6 - 12 months.

[Not_An_Abba_Fan]

Doesn't affect us either. We are looking to buy another property soon too. Just bought a block that went up 20k in value over a weekend.

[R Photon]

Bring on more tax cuts!!!!!

Which leads to inflation, which leads to interest rate rises.

One big circle.

[minux]

Which leads to inflation, which leads to interest rate rises.

One big circle.

My point exactly...

[minux]

had rudd started up a commision on this yet

Nah that will come out in the second book "The next 100 days"

[EvoVIIIJDM]

While these rates certainly do not help us, they certainly do not push us over the edge. Having worked on site and holding a very reasonable job in mechanical engineering, housing is not out of our grasp even on a single salary which we will be for 6-12months.

I have heard alot of people reaching in for their super claiming financial hardship to keep their house, my other half is a financial planner and deals with this day to day.
People just do not research into what they borrow, or their expenditure. Its heartbraking to see this.

[R Photon]

My point exactly...

Your obviously not a low or middle income earner.

Figures show that people in between these income brackets spend 30% of their gross income on housing.

While rate rises benefit a minority they have a detrimental impact on a majority.

[Lumps of cheese]

I'm locked in for 3 years on my home loan but still without that going ok.My wife is looking to get back to work regardless of interest rates so that'll make life easier too.

[Rufus®]

Really at 7.25% it shouldn't be affecting anyone but it goes to show how many people have borrowed on a borderline mortgage. You cannot expect to borrow 400k and hope that interest rates will stay low forever. It just will not happen.

Why do you assume that the reason the banks are foreclosing on properties is a result of people over extending themselves?

Peoples situations change over time, jobs change, pays change, families grow, families needs grow with it.

For me personally my biggest expense, apart from my mortgage, is childcare coming in at $730+/fortnight for 2 children (and thats only for 4 days per week).

So while some people do over extend themselves, you cannot account for every change that is going to affect your living style throughout your entire life.

For those that have over extended themselves its to bad that they have lost their homes, but they should have done the math better. For those that have lost their homes due to factors that have changed their lifestyles then that is a real shame.

For me, If I had to pick between kids or a mortgage, well I wouldn't have to pick, it'd be kids hands down!

[minux]

Your obviously not a low or middle income earner.

Figures show that people in between these income brackets spend 30% of their gross income on housing.

While rate rises benefit a minority they have a detrimental impact on a majority.

30% of income isn't much on a house. Problem is, Show me a person on 50k a year who owns say a 200k house. It just doesn't happen.

Why do you assume that the reason the banks are foreclosing on properties is a result of people over extending themselves?

Peoples situations change over time, jobs change, pays change, families grow, families needs grow with it.

For me personally my biggest expense, apart from my mortgage, is childcare coming in at $730+/fortnight for 2 children (and thats only for 4 days per week).

So while some people do over extend themselves, you cannot account for every change that is going to affect your living style throughout your entire life.

For those that have over extended themselves its to bad that they have lost their homes, but they should have done the math better. For those that have lost their homes due to factors that have changed their lifestyles then that is a real shame.

For me, If I had to pick between kids or a mortgage, well I wouldn't have to pick, it'd be kids hands down!

Umm the reason banks are foreclosing is because people over extended themselves, just look at the figures both banks and governments are releasing. People should not be allowed a mortgage if they have not raised at least a 15% deposit. It is up to the government to try and find a way to enforce this. A deposit is the biggest money saving factor in a mortgage. Although it doesn't help much with so many people taking up their line of credit(another stupid thing to enter into). I wouldn't think raising a deposit would be that hard, considering how many kids leech off their parents these days.

As for kids or mortgage, I'll take mortgage, kids would be detrimental to both my own and my partners careers, it would also put us in a position in where we cannot provide for Children the way we want to. I must think of our future and our children's future first.

I could go on and on and on but I won't.

[Torquen]

taking up their line of credit(another stupid thing to enter into).

I know the genral gist of "a line of credit" and i dont see how it is risky/bad??
Is there some catches?
explain please

[minux]

I know the genral gist of "a line of credit" and i dont see how it is risky/bad??
Is there some catches?
explain please

Too tired to explain, off to bed, but here, just a quick link

http://www.asic.gov.au/fido/fido.nsf...s?openDocument

As you can see, in many cases people go "overboard". It is just another trap for those not as well off to pay banks more money and end up in a never ending loop.

[Scooter79]

We bought at the beginning of last December. As soon as we could we fixed our rate for three years. Blind freddy could have seen these interest rate hikes coming. So far we've avoided three rate rises.

If you want to get your foot in the door of the housing market be prepared to move. My wife and I were both in Sydney renting near Kellyville owned by friends. We knew we wanted to buy but we were looking at close to $500K for a suburb that wasn't littered with crime. I found a job down the south coast and my wife works from home so we moved at the start of '07. We rented a 4 bedder place overlooking the ocean and headlands for just $300p/w. Then end of last year we found our current place for just $380K. Four bedder, office, double garage, outdoor room in a decent area. Point is you've got to weigh up what sacrifices you're willing to make to get into the housing market. For us the move wasn't a sacrifice because the lifestyle is so much better than what we had in Sydney. I guess the other thing is to free yourself from any debts and save as much as possible. The greater the deposit the less the interest rate will affect you.

...and you should visit someone like Mortgage Choice and find out exactly what you can and can't get so you know where you stand.

[Not_An_Abba_Fan]

30% of income isn't much on a house. Problem is, Show me a person on 50k a year who owns say a 200k house. It just doesn't happen.

I live in a 400k house, one other property I have is about 200k, and the block I just bought is worth about 160k, all this on 60k a year.

[CSP]

WOOHOO! Another rise today. Houses are going to be selling cheap in a few months

[EvoVIIIJDM]

Indeed. Moving back to Adelaide in 3 weeks, hopefully going to snatch me up a house for a reasonable price.

[50LTRv8]

I live in a 400k house, one other property I have is about 200k, and the block I just bought is worth about 160k, all this on 60k a year.

Are you Single? because if you have a wife at home looking after 2 - 3 kids, thats amazing. I was lucky, I got my house for 250K while having 60K deposit from a trust fund.

My wife and I have borrowed on the house to do some renos to it (the house was built in 79). My wage has increased from about 45K when we first moved in about 5 years ago to about 70K, and will be 80K by the end of april.

We have got ourselves to the point where we will have a large amount of money to use in reducing our debts and future investment.

The rate rises do hurt us a little, however we do a budget and stick to it, even to the point of both of us getting pocket money.We don't go out at all (3 kids and all), no pay tv, (just some ADSL). I think a lot of people waste money without realising, lunches, take out and stuff like that.

50LTRv8

[Not_An_Abba_Fan]

My wife is a stay at home mum, we have 5 year old twin girls. She has only worked maybe 6 months during the last 6 years. She will be getting a job this year though. It was timing that set us up, the first house we built, we sold right at the start of the boom so the new house prices hadn't caught up. We nearly doubled our money on the first house, this allowed us to build a much bigger house and have the same mortgage. We bought two investment properties while I was earning 40k, just sold one, made 130% on that one. The second one looks like it will pay off our mortgage when we sell it in 12 months time. The block was a chance purchase, we bought the first release on a Friday, then they went up by 20k on the Monday for the rest of the blocks.

We started small, had a bit of luck and I think good judgement, now we are sitting on about 750k of real estate and owe less than 230k.

[88GreenVN]

Fixed the rate when we got the VZ at auction last November. Looking to do an investment property early next year. I'll wait for thigs to get a bit dirty in the economy first. So when prices settle as the will (history shows that after a long rally prices slip between 10 to 20 % before recovering those losses) I have studied the Adelaide median house prices for the past 20 years and have a spread sheet to do price analysis by suburb. The first lot of data I have dates back to 1985. Also have some country areas of SA too.

So if anyone is thinking of buying in Adelaide and wants to know about a suburb compaired to the ones next to them - PM me and I can do a Excel sheet with graphs in about 10 mins.