RBA interest rates decision: Fixed-rate mortgage term ends leaves homeowner stressed

Add to that, utility bills, groceries and the cost of fuel all increasing simultaneously, and it can equal a perfect storm of financial pressure for many across the country.

Hurstville nutrition consultant Jade Lyndal — who bought her first home at the age of 22 — is struggling to get back on her feet after interest rate rises combined with the end of her mortgage’s fixed-rate term saw her repayments skyrocket.

“Increasing interest rates always loom in the back of your mind being a homeowner, it’s basically a given,” Ms Lyndal says.

“It’s why homeowners lock in fixed rates. The issue is you can’t lock in fixed rates forever. When someone’s fixed rate comes to an end, the new rates are whatever the market indicates, meaning they could be double what you had locked in, and this is exactly what happened to me.”

Ms Lyndal says the fixed rate term she had locked in saw her most of the way through the past two-and-a-half years of the pandemic, but when that came to an end she was suddenly left with a rate nearly double the one she’d been paying.

“The same has essentially happened with my electricity and gas bills,” she says. “The rates I was paying have doubled. Strata rates have increased by $100 a quarter and while council rates have so far stayed the same, I am expecting that will probably change … there is less money and more stress about making ends meet.”

RELATED: RBA hikes rates for eighth time in a row

As a result, Ms Lyndal has had to make several lifestyle alterations.

“[I have had to be] a lot more frugal,” she says.

“I have had to think about what I need versus what I want. For example, going out for a drink isn’t necessarily the most money-savvy but inviting people over for a drink is a good compromise to still be social without breaking the bank.”

The 25-year-old says she has been forced to apply this approach to most things, explaining she now often favours eating in over eating out, or opts for movie nights at home instead of paying for a night at the cinema.

“There’s also ensuring lights are LED, turning off power points at the outlets, using cheaper travel options like E10 fuel or public transport, having shorter showers and using eco washing machine cycles,” says Ms Lyndal.

“I never use a dryer for clothes, and don’t use AC but instead put measures in place to prevent the house from heating up, like closing the blinds,” she continues.

“But above all of this, sometimes you just have to say no. You can always do what you want because you simply cannot afford it.”

Many Australians are feeling financial pressure

It’s a familiar position for a lot of Australians. Research from Mitsubishi Electric indicates that 90 per cent of Australians are concerned about the rising cost of electricity, with 54 per cent avoiding dryer use, 38 per cent switching off appliances more often and 31 per cent limiting showers or skipping them altogether.

Ms Lyndal acknowledges how heavily financial stress can impact people trying to find the extra money required each month.

“To be honest, I’m still trying to catch up since everything has increased,” she says.

“I haven’t found a way to recoup the money. It is unfortunately not something that can change overnight. How else is someone supposed to regain the money they lost? Getting a second job [is one option] but at what expense? Working nine-to-five and then a night job or weekend job would burn anyone out,” she says.

“It’s a bit of a ‘just keep swimming’ moment, like Dory in Finding Nemo.”

If you’d like some advice on easing the pressure of your mortgage repayments, it may help to speak to a mortgage broker about refinancing your home loan. Alternatively, comparing a range of home loans online could help.

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