RBA Rises Rates for The 9th Time in a Row

Trying2SaveABuck on 07/02/2023 - 15:04
Last edited 07/02/2023 - 15:54

The RBA have announced its 9th consecutive rate rise in a row
https://www.news.com.au/finance/economy/interest-rates/rba-i…

Interest rates a ~4x higher then they were pre-pandemic in December 2019 the cash rate was 0.75% it now is 3.35%

We have about 1/3 of home loans coming of 'fix terms' this year meaning the 'actual' affect of the rate rises have not be felt but a lot of borrowers

now before the Karens post
a. in 1990 interest rates we 21%
or
b. you should of seen this coming

no one cares you paid 21% on your $30,000 home loan

literally no one and i mean no one could have seen this level of interest rate hiking happen in such a short period of time this is history making speed rates are rising - keep in mind the high inflation is also hurting borrows so it is a double hit

of course we need to combat inflation but im posting to see how this will affect people who are 'borrowers' like myself - i know a few people that are 'really' feeling the pinch and wanted to say there is support out there via financial stress hotline and you can contact your lender for support regarding your situation if you are finding yourself in trouble

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    Interest Rates have me worried
  • 357
    Interest Rates dont have me worried
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    I dont have a loan
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Comments

  • iDroid on 11/02/2023 - 16:17
    +4

    literally no one and i mean no one could have seen this level of interest rate hiking happen in such a short period of time this is history making speed rates are rising - keep in mind the high inflation is also hurting borrows so it is a double hit

    Err, that's just not true.

    Anyone with even a passing understanding of economics knew this would be the end result.

    Money has been essentially free (cash rate at 0.75%, basically interest free at that rate) - this was guaranteed to create significant inflation.

    Our economic systems manage inflation through interest rates.

    There was never going to be a different outcome.

  • Wallyt99 on 11/02/2023 - 16:53

    Spending is up… It just gets you less.

    • Top G on 11/02/2023 - 18:57

      Recording spending for Christmas/Black Friday 2023 like a broken record hehe 😉

  • SpaceNinja on 11/02/2023 - 19:50

    This might be unpopular opinion but paying a buck more for milk seems to be a smaller problem than housing, economy, employment crash plus recession.

  • ssfps on 11/02/2023 - 22:19

    literally no one and i mean no one could have seen this level of interest rate hiking happen

    A lot of people have predicted this. Ultimately it's due to corrupt banking system, fractional-reserve banking and debt-based economy relying on perpetual inflation.
    This is what happens when interest rates go low, and when the government then prints more money via QE for "stimulus".
    No "mainstream" people predicted this, but plenty of occupy-wall-street types did.

    FWIW i'm pretty concerned, it effects us a lot.

    • S2 on 13/02/2023 - 20:32

      A lot of people have predicted this.

      What are they predicting next? Should everyone fix their loans now?

  • nobro25 on 11/02/2023 - 23:14

    Inflation to the moon! RBA will increase rates to +8% by 2024.

    • PopCounty on 13/02/2023 - 14:45

      😂
      Aus will be broke if the rates rise this fast to that level.

  • liongalahad on 12/02/2023 - 01:43
    +1

    I just wish we could get a 20y or 30y fix rate loans like in Europe - peace of mind

  • congo on 12/02/2023 - 08:53
    +1

    A lot of comments here seems to be from people who are not investors.
    In the last census, there was a huge number of unoccupied houses and apartments.
    I think this shows that many investors are fine and not worried with the rate rises as they can afford to leave their investments unoccupied.

    The gap in wealth between the haves (investors) and haves-not (non homeowners) is BIGGER than what the haves-not can imagine.
    I have a friend who had enough money to invest in a house 20 years ago, but refuse to do so because he thought house prices would 'pop'. He still doesn't own one today and never will.

    Investors would want the rates rises to go up as much as possible, so they could grab a bargain and add to their portfolio investment.
    The next few years would be a good time to invest, but wait for the bottom.
    If you miss the boat, it could be your last opportunity, not just for you, but also for your future generations, because future generations would have NO chance of buying a house.

    • slugsandsnails on 12/02/2023 - 13:27

      I like this. When do you think the bottom might be? Mid 2023 or later?

      • congo on 12/02/2023 - 14:51

        No one knows when the bottom is, otherwise we would be all wealthy.

        But we can make good predictions from past cycles.

        I have noticed that past (stocks, bitcoin, real estate) cycles, that the bottom occurs when there is a lot of pain and the "doom and gloom" is on the front page of newspapers and is the main headline news.

        You have to do the opposite of what the mainstream media is saying.

  • ymmf on 12/02/2023 - 10:56

    If there are so many fixed rate loans up for renewal this year, and if people are not going to be able to afford the mortage at the new rate, why are we not seeing a flood of properties being offloaded on the market?

    • congo on 12/02/2023 - 10:58

      As per my statement above, many investors are doing fine and can afford the increased repayments, they don't need to sell.

      • Benno007 on 12/02/2023 - 21:40

        Because they’re passing on the rent rise to tenants from wealthier places 😩… 17% rate rise sucked for us.

  • KaTst3R on 12/02/2023 - 11:07
    +4

    If you have cash, now is absolutely the best time to buy when everyone is in panic.

    • kiriakoz on 12/02/2023 - 14:51

      I think interest rates will still rise personally. I'm not an economic expert, but just based on past experience.

    • Ghost47 on 12/02/2023 - 20:56

      I wouldn't say the panic has set in just yet. Let the pinch come on a bit more with the rate rises, and as time goes on more people will be rolling off their fixed rate mortgages.

      Anecdotally I've noticed a lot of furniture on the nature strips in my suburb and nearby suburbs, not sure if it's renters or homeowners moving out.

      • congo on 12/02/2023 - 21:20

        This happens a lot at the end of the year and start of the year.

        • Ghost47 on 12/02/2023 - 21:22
          +1

          Fair enough.

    • Frozensage on 12/02/2023 - 22:30

      News flash, ppl can just not sell unless they forced to. So in reality, the listing numbers are lower and generally of lesser quality. When you actually get a decent one, it will still go for a good price. Also, borrowing power has been cut, so those previously on the edge of purchasing new home, single or first home buyers most, still priced out of the market.

  • kiriakoz on 12/02/2023 - 14:05
    +2

    I knew this would happen when Covid first occurred, so I've been in a rush to pay off my home loan. I even sold some football cards I'd been collecting which increased in value when everyone was in lockdown and had nothing better to do… down to just over $50K when I had about $200K when covid first hit us.

    Pretty much unimpacted by interest rate rises. I acknowledge I am lucky though as got my loan in 2009 when houses were half reasonable in Sydney.

    • RotundPolarBear on 12/02/2023 - 15:01

      Wow your football cards must have been worth a lot.

      • kiriakoz on 12/02/2023 - 15:31
        +3

        The were worth a lot but increased ridiculously when Maradona passed away as I had a heap of his autographs.

  • StalkingIbis on 12/02/2023 - 16:30
    +3

    Interest rates are really not that high atm compared to recent history (10 years).

    • kiriakoz on 12/02/2023 - 17:53
      +5

      Agreed. Nobody seemed to appreciate when they were super low, there's just mass hysteria when they go up. Should've expected them to go up when you borrowed any time in the last few years. Only thing I'd say to balance that is that house prices are ridiculous in general.

      • DarkOz on 13/02/2023 - 09:43

        they were super low

        I spoke to an investor that had dealings with one of the big 4 banks and we were chatting about the inflation rate going through the roof and it is real but people don't seem to care. He pointed out that the near 0% interest rate was an "emergency rate" and it was never meant to stay that low for such a long time. The RBA kept it too low for too long and borrowers got too comfortable with the easy money.

        • kiriakoz on 13/02/2023 - 16:43

          Yeah, I don't want to hammer people too badly or seem heartless. I manage a lot of people in their mid to late twenties at my workplace. I feel like it's a stress for a lot of people to get a house, especially if their family push it. A lot of women especially feel like they should get a house by a certain age, settle down, have kids etc… house prices are an obstacle to that and people probably got hopeful when interest rates went down.

    • Frozensage on 12/02/2023 - 22:27
      +1

      but debt amount is higher, each one of those 0.25% is amplified.

  • the wiz on 12/02/2023 - 20:21

    If you borrowed $500,000 thinking that it would be interest free for the next 30 years…

    Reality just arrived. And I have zero sympathy.

  • Cookiescream on 12/02/2023 - 21:16
    +2

    I am on fixed rate until end of next year. I chose a 4 years fixed rate, when my broker kept asking "why? Are you sure?" And the rate is 1.98%.

    Now, although i am not worried just yet, inflation and costs are killing me.

    I am even launching my own business to see if i can lift a bit of extra cash.

  • Frozensage on 12/02/2023 - 22:27
    +1

    Ppl always seem to just talk about mortgage, but there are plenty of other debt funded things like business, personal loan, car loan, study loans, credit card… those who never pay their cc on time, it's now getting even more expensive. Business will have to continue to put up prices or go out of business. Sooner or later the shockwave will just hit everyone. We just need the migration door to start and see the unemployment rate to go back up again.

  • payless69 on 13/02/2023 - 08:41

    More pizza from Antonio.
    Grazie!

  • kalithreaver on 13/02/2023 - 12:07
    +7

    We bought our house around 9 years ago and our interest rate was around 6%. During these past 9 years the rate has dropped but we have continued to pay our mortgage like it was still at 6%. When our interest rate was at the lowest during covid we were paying double what we were expected by the bank. We also saved as much as we could comfortably without affecting our life style too much. We will have our house paid off by the end of this year.

    I think we are the exception when it comes to my friends and family group. I dont think anyone else we know chased better rates, and pushed early to pay it off as fast as we can. I know a couple would have just accepted the lower payments so they had more spending money.

    • congo on 13/02/2023 - 14:28

      10 years to pay off a house. Well done!

    • kiriakoz on 13/02/2023 - 16:45

      Well done. It is an achievement IMO.

    • StalkingIbis on 14/02/2023 - 08:04

      GJ.

      double income the whole time?

      • kalithreaver on 15/02/2023 - 09:36

        My wife took a year off when we had our son but yeah the rest was double income.

        • StalkingIbis on 16/02/2023 - 08:19

          well done. Whats next?

          • kalithreaver on 16/02/2023 - 09:04

            @StalkingIbis: we want a new car so thats on the books but also looking into investment options now as now the plan is to setup for our retirement in the future. investment property is an idea but the prices are stuffed currently and stocks is another idea, plus some super contributions.
            ill probably just watch for a bit.

  • DarkOz on 23/02/2023 - 09:19
    +2

    Meanwhile over in New Zealand they just bumped it up another "smaller" 0.50% to 4.75% because inflation is still too high and not going down. In Straya we are dawdling at 3.35% with "BIG" 0.25% increases while inflation is rising and yet to peak. For some ironic reason the RBA was grilled by the Senate last week for raising rates too high and too quick?

    • Trying2SaveABuck on 23/02/2023 - 09:29

      Australians carry a lot more debt then NZ matter of fact Australians are the more indebt people on the planet?

  • MrBillions on 24/02/2023 - 14:30

    More coming…they are going to submit us into recession…lunatics

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