Interest rates set to rise again!

[Chai]

http://www.smh.com.au/news/national/...339081034.html

Didn't he promise last time to keep interest rates low? With the cost of housing and living, I wonder if I'll ever be able to afford my own place.

Will this rate hike affect any of you NPers adversely?

[spiralgirl]

thank goodness we applied for a loan THIS week and not in a months time! ( we are getting a fixed rate loan so we will be ok for 3 yrs)

[Heartwood]

Yes, we've decided to put off our own home for a few more years and decided to buy a cheapo investment property in the outback to get things rollign.

[MindfulMama]

We really want to get our own place in the next couple of years but it's looking more & more unrealistic - it's a shame we (like many couples) may need to decide between me staying at home with littlies who have their own home vs returning to work so we can afford to pay a mortgage :(

[*kaos*]

You know what, unless interest rates go up, house prices are not going to come down or stabilize, so affordability isn't going to change. It isn't such a bad thing you know.

When purchasing our own place, we took into account rate rises to make sure that we would still be able to comfortably make repayments. It's good planning....

[mummymoo]

The government should never have promised that interest rates would be kept low. Politicians should stay out of monetary policy decisions as much as possible, IMO.

As a semi-outsider, I see a lot of fear of interest rates in Australia compared to other countries, presumably from the time when they were in the high-teens. The fact is that if consumption is continuing to rise and put pressure on inflation, there isn't much else they can do except cut *their* spending or raise interest rates to encourage consumers to cut spending and put money into savings instead.

As kaos said, you have to prepare for this when taking out a mortgage. We started out by over-paying ours by a reasonable amount each month, but with all of the rate rises in the last year, we might end up just covering the minimum payment if we get another rise.

At the end of the day, and things are tight for us, better this than inflation rising out of control, which I believe to be a reasonable risk with tax cuts and election year govt spending. Also, as we get closer to full employment, we should start to see a inflationary pressure on wages.

[*kaos*]

Hmmm, Kathryn seems to know a bit about economy

[Rinelle]

Grrr. Our loan will be a set interest rate for 5 years or so I think, but if things don't actually happen soon, it's going to be set at the higher interest rate.

[mummymoo]

Hmmm, Kathryn seems to know a bit about economy

Bit rusty these days...

[DePome]

Tahne, a potential warning for you... a mortgage broker told me that the interest rate taken is that at loan settlement, not at the time of application. Perhaps you had better check up to be sure.