House prices and cost of living is bad, but:
My partner and I were expecting further rate decreases following the last one or two decreases we’ve had, so the current increase is definitely disappointing
Is just naive.
fr. We bought in '22 and we padded out our budgeting by taking the monthly mortgage payments, rolling that up to the nearest thousand (eg: 2000 instead of 1700 [not actual numbers!!]) and putting that into our offset account per month. Because we fully expected to take it up the arse.
Consequently there's been no fuckin' change to the payments we throw in there.
I've been doing the same, and it really is the way to go. Haven't had much in the way of holidays or anything else expensive, but my house will be paid off by next year if all goes well.
Money sitting in the offset is also earning at the same rate as your mortgage interest rate, which is pretty good compared to term deposits or savings accounts.
Oh man, you get offset interest? We don't. But it has been satisfying watching it drop our tital loan for interest payments as it grows
No, but by the nature of offsetting your loans interest, it works out about the same. Every dollar in your offset is saving you from paying 5% on a dollar you owe on the loan.
To use silly numbers, if you have a loan at 5% for $100, and a savings account at 2%, at the end of a year, your down $5 on the loan, and up $2 on the savings. If instead you have $100 in your offset, your down $0 on the loan, so your offset has functionally earnt at 5%.
I just exchanged contracts on an apartment so I'm not surprised they chose now to start cranking the rates back up again - I was waiting for something annoying to come along once I committed. Luckily I'm not a complete goose so I didn't borrow right to my max, should be able to handle a few rises without being overly stretched.
So it's all your fault... jerk.
There are some naive people in this article. One that says they raised interest rates before and it didn't fix inflation so why are they trying it again? 😭
Does Australia not have fixed rate mortgages?
Most countries don't have long term fixed rate mortgages! They were first established in America by FDR in 1934 as part of the New Deal!
Basically no. The vast majority are fixed rate for only the first 1 to 5 years.
More info here: https://lendingloop.com.au/what-is-the-longest-fixed-rate-mortgage-in-australia-and-how-can-it-benefit-you
We do
https://www.queenslandcountry.bank/Banking/home-loans/
tbh this is not actually a real problem country wide, interest rates are at their average and you will always find people who got in over their head, this is just a sob story
the Ultimate Home Loan Package (Fixed) locks in an interest rate for up to three years
Australian "fixed rate" is just variable rate with a locked in period. The USA has fixed rate for the term of the loan as standard
"We would never have bought..."
So they got large mortgages when interest rates were down near the lowest that they have ever been in this country, since Federation.
Then it's all surprised pikachu face when rates start to head back towards the long-term 5-6% average and they're suddenly paying 5K a month.
History. It's there for everyone to look at.
Does anyone remember the early 90's? 17% interest rates. Imagine that on a $1,000,000 mortgage. $170k per year interest. That'd certainly be one way to bring house prices down. It'd destroy the economy and probably cause a pile of social issues as well, but yeah - it'd bring house prices down.
The banks would collapse with the number of loan defaults and would require a government bailout, it would be chaos
I mean they don't have to jump from 3.85% to 17%! There's some other numbers in between