Rate increase hits homeowners and renters

Rising interest rates could mean an increase in rental costs. 283737_02

By Jamie Salter

The Reserve Bank of Australia (RBA) is lifting interest rates for the second time in weeks, placing more strain on home owners and renters alike.

The big four banks are following suit, with Commonwealth Bank lifting its mortgage rates by 1.4 percent points and NAB by hiking fixed rates by up to 1.10 percentage points.

RateCity research director Sally Tindall said CBA and NAB were not hiking in isolation.

“ANZ, Macquarie and HSBC have all made sizeable fixed rate hikes in the last fortnight and we expect others will follow,” Ms Tindall said.

“The banks are responding to the rising cost of fixed-rate funding, but they’re also factoring in market expectations the cash rate will go beyond the RBA suggested neutral cash rate of 2.50 per cent.”

Casey North CISS executive officer Susan Magee has noticed an increase in people seeking support and said it won’t just be home owners who will be struggling.

“The cost of food, fuel and utility bills has gone up and we’re seeing people who cannot afford to cover rent and there’s no alternative for them,” she said.

“If mortgage rates go up then that’s going to flow on to the tenant.”

Ms Magee said there continues to be insufficient public and social housing in the City of Casey and surrounding suburbs.

“Mortgage interest rates wouldn’t affect those people because they’d be in government or public housing,” she said.

After more than two years of Covid-19, CISS has found people of an older age group continue to struggle to get reemployed.

A single adult who receives JobSeeker support will get a maximum fortnightly payment of $642.70, a single parent is entitled to $691 while partners will earn$585.30.

With the rising cost of rent and energy costs during winter, the payments are not enough for many struggling families.

In March 2022, the Victorian Housing Register received a total of 64,304 applications for social housing.

About 19 per cent of priority applicants can wait up to two years for public housing.