Melbourne couple wipe $75k off their mortgage repayments after surprise competition win

One Melbourne couple has revealed how they were able to save $75,000 on their mortgage after a year of being crippled by interest rate rises.

An Australian couple has revealed how they wiped $75,000 off their mortgage repayments after rate rises dried up their savings to almost nothing.

Scott Pappali and his wife, from South Morang in Melbourne’s northeast, had been crippled by interest rate rises which resulted in their mortgage costs skyrocketing.

However, the pair’s luck turned when they won a questionnaire competition, run by furniture company Koala – with the prize that their mortgage repayments would be covered for a year.

Scott won $75,000 of repayments from a competition.

The competition entitles the couple to a $75,000 payment which they will receive in a bulk sum.

Mr Pappali, 43, said his family’s mortgage repayment had become $2900 per month, or $34,800 over the year.

“Our mortgage repayments had gone up 50 per cent over the span of six to eight months. It was crazy,” he said.

“It ate into a lot of our savings. So, our savings went down from like $10,000 to basically being used for just paying the mortgage. Pay cheque to pay cheque.”

Mr Pappali said before the big win, his family were forced to sacrifice their lifestyle and savings goals due to climbing interest rates.

“We stopped saving so we had to push back holidays,” he said.

“We usually keep is a rainy-day fund because I’m a diabetic and I was in hospital a couple of times a few years ago which was very stressful with the mortgage.

“The last year has just been crazy so now we’re just trying to save as much as we can because it just wasn’t possible.

“Having no mortgage has just reduced stress overall. Knowing that we’ll be okay if I’m in the hospital or if I can’t work for a few months, we’ll be okay.”

The family's house is in Melbourne's northeast.

Mr Pappali said regularly entering competitions was one of his inventive ideas to try an avoid climbing repayments but nevertheless, winning was a surprise.

“I was thinking I was being pranked or scammed. Now I know it’s real it’s such a huge, huge relief,” he said.

“I mean, it’s unbelievable. With everything rising up these days, it’s crazy.”

Research from Roy Morgan this week revealed almost one third of Australian mortgage holders were at risk of mortgage stress in the three months to July 2023.

This period involved two interest rate increases of 0.25 per cent which took official interest rates to 4.1 per cent in June, up from 0.85 per cent 12 months prior.

More than 1.5 million households, or 29.2 per cent of mortgage holders, are now at risk of mortgage stress after the RBA increased interest rates at 12 of the past 15 monthly meetings.

Mortgage holders are considered at “at risk” when they spend between 25 and 45 per cent of household income each month on their home loan.

Mr Pappali said he has some sensible plans for the money that’s set to be saved over the next year.

“I’m going to be very boring because I had initial plans of investing so that way I can build a rainy-day fund and we will pay off a bit of the mortgage as well,” he said.

“And finally go on a holiday maybe!”

Originally published as Melbourne couple wipe $75k off their mortgage repayments after surprise competition win