How rate rises will hit Gympie, Fraser Coast, Bundaberg homeowners

Homeowners across the region face paying $70 more each month on their mortgage repayments when banks pass on the first cash rate rise in 11 years, and local election candidates are unsurprisingly split in their response.

Wide Bay and Hinkler homeowners face paying up to $70 more each month on their mortgage repayments when banks pass on the first cash rate rise in 11 years.

Analysis of REA Group data reveals the jump could add about $68 to Gympie and Fraser Coast residents’ repayments each month, and up to $64 on repayments in Bundaberg.

The Queensland electorates hardest hit by the rate rise include Herbert, where repayments will rise as much as $100 per month, and Bonner, where the average repayment will jump by up to $94.

PropTrack economist Paul Ryan said the RBA’s plan in raising the cash rate was to “take money out of people’s pockets” to reduce spending and therefore inflation, but this was “incredibly unwelcome” from households.

“People are seeing such high cost of living pressures, groceries have increased really strongly,” he said.

Wide Bay and Hinkler homeowners are facing paying up to almost $70 more on their mortgage repayments following the first official rate rise in 11 years.

“Most households will have to reassess their budgets so it may be (cutting out) Netflix or going out to dinner and those kinds of luxuries that people enjoy.”

The arrival of the rate rise in the middle of the federal election has posed an interesting challenge for the candidates.

Incumbent LNP candidates, Llew O’Brien for the Wide Bay and Keith Pitt for Hinkler, stood by the party’s efforts to help with the growing cost of living.

“The Coalition’s $250 cost of living payments have started hitting the bank accounts of 48,214 pensioners, disability support recipients, carers, jobseekers and eligible self-funded retirees in Wide Bay,” Mr O’Brien said.

“As the banks move to pass on this .25 per cent increase they must also immediately increase the rate of return for their deposit holders who have seen very little in returns on their cash investments for years,” he said.

Incumbent LNP candidates Llew O’Brien (pictured for Wide Bay) and Keith Pitt (for Hinkler) said the government had unrolled a number of policies and tax offsets to help with the rising cost of living and if re-elected more would be on the way.

Mr O’Brien and Mr Pitt pointed to the low-and-middle income tax offsets and slashing of the fuel excise as other measures designed to ease the burden.

There were other policies in the mix too.

“A re-elected Coalition Government will also freeze the lower deeming rate for the next two years at 0.25 per cent to ensure payments are not reduced as earnings increase from deposit accounts held by social security recipients,” Mr Pitt said.

“The decision by the Reserve Bank of Australia is independent of Government and a sign that the economy is coming back after the pandemic.”

Hinkler Labor candidate Jason Scanes said the rate rise was “just more proof of Scott Morrison failing Australians”.

Hinkler ALP election candidate Jason Scanes, said the rate rise was the latest proof of how the LNP federal government had failed Australians.

“After almost a decade of this Liberal-National Government, the cost of living is out of control, real wages are failing, and this rate rise means family budgets are under more pressure than ever.”

Wide Bay Labor candidate Geoff Williams shared Mr Scanes’s view.

“Labor has a plan to grow the economy without adding more pressures on working families, to get real wages growing again and to ease cost of living pressures by providing cheaper power bills and more quality affordable childcare and healthcare,” Mr Williams said.

“Our community cannot afford to risk more failures and more mistakes under Scott Morrison.”

Hinkler Independent Jack Dempsey, a hot favourite to challenge Mr Pitt for the seat, was “concerned for everyone who’s being battered by the increased cost of living”.

Australia’s big four banks have all passed the 0.25 per cent increase on. Picture NCA NewsWire / Emma Brasier.

“The budget sugar hits will wear off soon and the Government doesn’t seem to have a plan to make things better for Australian families,” Mr Dempsey said.

“It’s the task of whoever forms government to have a plan, not the crossbench.”

Paul Ryan said the initial rate rise would unlikely be enough to put people into mortgage stress, but this may change as rates continue to increase throughout the year.

He said interest rates from the major banks were predicted to reach between 3.75 per cent and 4.25 per cent by the end of the year.

“Many households will be thanking their lucky stars they fixed their rates,” he said.

The country‘s big four banks have all passed through the full 25 basis point (0.25 per cent) increase following Tuesday’s decision, meaning the average variable rate for most borrowers is now 2.75 per cent.

Westpac chief economist Bill Evans is already forecasting a further 40 basis point lift in June.