RORY SALAZAR | Finance | Contact
A million folks on fixed-rate mortgages have been insulated against the RBA’s interest rate rises over the last 18 months. But with their fixed-rate period ending, they are now forced to look out over the fixed-rate mortgage cliff and stare wildly into the endless abyss.
And the Advocate can report that the abyss is staring right back.
One such pair of abyss-lookers is local Betoota Ponds-based couple, Hilary and Shaun Herbert. The Herberts have been on a 2% fixed-price mortgage for the last 24 months. In that time their repayments have been manageable despite all the hype around the cost of living crisis gripping Australia.
However, next week their fixed-interest period ends and they will revert to their Bank’s variable rate. A rate which as of this morning was 6.48%. This will see their minimum repayments balloon out to more than triple, forcing them to find an extra couple thousand dollars each month just to service the minimum repayments.
Thousands of extra dollars they simply don’t have.
“Yea, Hilary’s pregnant so she’s going to be out of the work force for a bit,” Shaun told the Advocate from their expensive-to-run Meriton shitbox located out in some far flung new suburb where no services or facilities or even trees to provide shade exist.
“I’d be happy to be a stay at home Dad and she works, but the reality is my wage is higher and we’re gunna need every penny.” Shaun and Hilary nodded at each other with anxious, furrowed brows.
“Be interesting to see how fucked we are,” Hilary offered while unconsciously rubbing her pregnant belly. “We’ve done a budget and it’s grim,” she continued, equal parts stressed and numb to the surreal situation they find themselves in.
Reportedly, many Betootanese couples are in this same terrifyingly uncertain situation. The mortgage cliff is rising up before them and with more rate rises likely to come over the next six months it looks as though it is definitely going to get worse before it gets worse.
For those segments of the population who are insulated from this looming mortgage cliff, it will certainly be interesting to see how fucked these people really are over the coming weeks and months.