It's been a long time since interest rates have risen in Australia. For some mortgage owners/business owners this is the first time they've experienced something like this.
The RBA is trying to slow demand, I wonder how much demand is slows by either buying power erosion (via higher mortgage rates) or households tightening their belts and withholding spending to add to their savings buffer.
My question is; have the prospect of higher rates changed your spending habits?
That and the 'want vs need' factor for me.
https://www.ozbargain.com.au/comment/12287265/redir
ive had to cut back
no more almond milk and one less caramel shot
I refuse to spend more than $2.50 on an iceberg lettuce.
My homemade burgers haven't been the same for months :(
Use cabbage. Very nice.
Not particularly but I'm relatively frugal anyway. The only difference in my spending has been less going into my savings and more being paid to the bank.
No option for increasing spending for savers?
Already cut to the bone. Saw this coming ages ago. Once real helicopter money (as in giving money to people no questions asked, in this case not just people but companies who don't need a bail out and won't get clawed back) is handed out guaranteed inflation.
2008/9 there was no inflation because all the money was given to banks to bail them out, then they had to cut back to repay it. JobKeeper was a free hand out.
this time if SHTF, there will be bail-ins
where the banks use your money to save their behinds
It sounds like I did the smart thing going broke in advance…
After Cyrus 10 years ago when they had bail ins people who get a hair cut deserves it.
Most people would have planned for this to happen.
Interest rates weren't going to stay at historic lows forever.
Everyone should have been actively lowering their debt levels during the low interest rate decade to get ahead in their mortgage.
I think you'll find the sample size on ozbargain is not reflective of greater Australia.
From the sounds of things, Ozbargain's average wage is far higher, also i'd say we're more frugal and thus would be less at risk when the rate rises did come.
It's the 10-20% of mortgage holders who have leveraged themselves to the hilt that'll be most under stress
Ozbargain's average wage is far higher
True but also those people are surprisingly silent. HODL on that Tesla order.
Plus OzB just saps your money one bargain at a time.
I may not own a house but as long as i have Eneloops and my high yield investment AMG i can at least see myself as i cry into the rearview mirror.
I'm fixed for the next 12 months so I have not yet had my rate increased. I'm already overpaying my mortgage so when my rate does increase I won't really notice it.
I am trying not to waste as much food now just as a precaution. I have always chosen my meals for the week depending on what's on special.
I'm not running the split system all day for my cats anymore (when the fire's not going) and instead will only have it turn on at 4pm (I get home late). Although I will say I'm doing these things due to the rising costs, rather than interest rates.
I have a healthy buffer and will not be concerned about interest rates until they hit 8%. At 12% I may be struggling, depending how quickly that happens. If it's 5 years, then no dramas. It's worth noting that I am the sole income earner in my household, as my cats refuse to get a job.
It's the price of an item that matters imo.