{"id":266166,"date":"2026-02-03T22:15:07","date_gmt":"2026-02-03T22:15:07","guid":{"rendered":"https:\/\/www.newsbeep.com\/nz\/266166\/"},"modified":"2026-02-03T22:15:07","modified_gmt":"2026-02-03T22:15:07","slug":"we-never-would-have-bought-australian-mortgage-holders-feel-the-pain-as-interest-rates-rise-again-interest-rates","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/nz\/266166\/","title":{"rendered":"\u2018We never would have bought\u2019: Australian mortgage holders feel the pain as interest rates rise again | Interest rates"},"content":{"rendered":"

As the Reserve Bank of Australia<\/a> lifted the official interest rate on Tuesday, one regional New South Wales couple said the dream of building a home has turned into a financial \u201chustle\u201d they no longer want to maintain.<\/p>\n

After the pair, 25 and 26, settled on land in September 2022, rising rates and cost of building materials decimated their initial budget.<\/p>\n

\u201cIf we had known how much our repayments would end up, we never would have bought,\u201d said the 25-year-old woman, who did not wish to be named.<\/p>\n

Sign up: AU Breaking News email<\/a><\/p>\n

While they can currently cover their bills and groceries, the financial pressure has forced them to put major life milestones, like starting a family, on indefinite hold.<\/p>\n

\u201cMy partner and I were expecting further rate decreases following the last one or two decreases we\u2019ve had, so the current increase is definitely disappointing,\u201d she said.<\/p>\n

They have decided to sell their newly finished home and pivot to the tiny house movement due to \u201ccost of living and lack of freedom\u201d.<\/p>\n

\u201cHumans are not meant to live this way,\u201d she says. \u201cIt\u2019s causing a cascade of issues, health issues, a mental health crisis and the fact that so many people aren\u2019t having kids because they simply can\u2019t afford it.\u201d<\/p>\n

On Tuesday afternoon the Reserve Bank hiked rates for the first time in over two years in a blow to mortgage holders<\/a>, who bear the brunt of dealing with an unexpected jump in inflation<\/a> through the second half of 2025.<\/p>\n

The widely anticipated decision marks the end of the shortest rate-cutting cycle in the RBA\u2019s modern history, after three reductions in the cash rate target in February, May and August of last year.<\/p>\n

The RBA\u2019s governor, Michele Bullock, said in a Tuesday afternoon press conference that the rise is \u201cthe right thing for the economy\u201d.<\/p>\n

\u201cIt is best if we get inflation under control, and our instrument is the interest rate,\u201d she said. \u201cI understand that people with mortgages find that hard, but the alternative is potentially even harder.\u201d<\/p>\n

\u2018Everything\u2019 going up<\/p>\n

Gold Coast first home buyer Jack Petzke settled on his first house in October 2025 with his partner, Alyshia Cater.<\/p>\n

The couple, in their late 20s, have financial strategies to cope with the rising cost of living while paying off a mortgage, including an offset account and strict budgeting, even looking for ways to make additional contributions to their principal as interest rates climb.<\/p>\n

Jack Petzke, a first home buyer from the Gold Coast, with his partner, Alyshia Cater. Photograph: Jack Petzke<\/p>\n

\u201cI\u2019m the type of person that plans a lot \u2026 I use Excel to map out all our budgets,\u201d he said.<\/p>\n

With an upcoming wedding in May, financial pressure is compounded, forcing the couple to find a balance between milestone savings and mortgage security.<\/p>\n

\u201cThe rate increase is going to cause everything to go up; I\u2019ll need to revise our budget to make sure we\u2019re still putting enough in on a weekly basis to cover all bills throughout the year,\u201d Petzke said.<\/p>\n

\u201cIt does put a little bit more financial pressure on us to make sure that we have got our ducks in a row.\u201d<\/p>\n

The couple\u2019s mortgage broker, Lauren Hall at Loan Market, said \u201ca quarter-point increase could be around $100 extra per month for the average mortgage\u201d.<\/p>\n

\u201cNo one is eager to give their lender more money, but most people will have a buffer to absorb at least a couple of potential cash rate increases,\u201d she said.<\/p>\n

The CEO of the Mortgage & Finance Association of Australia, Anja Pannek, said the increased official cash rate would be felt by millions of borrowers.<\/p>\n

\u201cThe overwhelming majority of mortgage-holders are on variable rate home loans and this will mean a hit to their finances,\u201d Pannek said. \u201cFor an average household with a mortgage of $694,000, a 0.25% increase in interest rates equates to an extra $109 in monthly repayments.\u201d<\/p>\n

Feels like \u2018punishment\u2019<\/p>\n

A 31-year-old Melbourne man, who did not wish to be named, bought his first home in October 2025. He said Tuesday\u2019s rate hike feels like a \u201cpunishment\u201d.<\/p>\n

To secure his mortgage on a single income, he took a casual job alongside his full-time role, skipping travel, engagements and weddings to save.<\/p>\n

Despite his caution in not borrowing to his \u201cabsolute maximum\u201d, he now feels a mix of anxiety and anger.<\/p>\n

\u201cIn this economy, you can never have too much money, especially on a single person\u2019s income,\u201d he said.<\/p>\n

While he anticipated the possibility of a rise, he said \u201cdecision-makers are punishing the wrong people for very little benefit\u201d.<\/p>\n

\u201cThe RBA made some pretty strong rate hikes a few years ago and it clearly didn\u2019t do anything to adjust inflation,\u2019\u201d he said.<\/p>\n

He said further rate hikes would be \u201ca considerable lifestyle impairment\u201d.<\/p>\n

\u201cIt\u2019s possibly damaging the economy further because people can\u2019t spend money on other businesses or small discretionary things, like gifts.\u201d<\/p>\n

Pannek said mortgage holders looking to explore their options should go to the expertise of a broker.<\/p>\n

Spiro Kolokithas, a broker and managing director of What if We Finance, agreed professional advice is far more valuable than \u201cgetting it from TikTok\u201d.<\/p>\n

He said the rate hike will have varying impacts on his 1,500 customers \u2013 depending on their stage of life \u2013 but doesn\u2019t think there will be a \u201chuge dent in borrower activity\u201d from one rate rise.<\/p>\n

\u201cBut if we start getting two, three, four rate rises, which would basically be the reversal of the rate cuts, we\u2019re going to see a slowdown,\u201d he said. \u201cThis will have a psychological impact on people and force them to budget more and think more.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"As the Reserve Bank of Australia lifted the official interest rate on Tuesday, one regional New South Wales…\n","protected":false},"author":2,"featured_media":266167,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[138,219,111,139,69],"class_list":{"0":"post-266166","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-business","9":"tag-economy","10":"tag-new-zealand","11":"tag-newzealand","12":"tag-nz"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/266166","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=266166"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/266166\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/266167"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=266166"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=266166"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=266166"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}