Gold Coast family ‘extremely stressed’ about potentially losing their home

With homeowners on a knife edge as interest rates are due to be hiked again, a Gold Coast family is worried about losing their home.

Jason Ross and his wife Emma felt extremely lucky to be able to buy their dream family home but now they are worried they could lose it.

The couple fixed their mortgage rate two years ago with a low of 2.5 per cent with Bank West but it’s due to expire on Valentine’s Day, with a chance their rate could jump to a whopping 6.3 per cent.

Jason said they currently pay around $2000 a month for their four-bedroom Gold Coast home but the rise in interest rates would see their finances take a hit in the thousands.

An interest rate of 6.3 per cent would add an extra $1200 to their monthly repayments – which Jason said would almost double what they are currently paying.

The couple, who have two kids aged three and eight months, have watched interest rates rise for eight consecutive months in 2022. Another rate rise is predicted on Tuesday and Jason describes the huge hikes as “stomach turning”.
“There is definitely a lot of stress with the whole cost of living going up so much, especially with fuel and food, and then my wife has just come off maternity leave for our young one so we are adding the extra cost of kindy on top of that,” he told news.com.au.

“We were extremely stressed about the fact that we thought with those repayments we wouldn’t be able to afford the house and we thought that we could lose it.

“When it comes down to it, you can’t sell and buy something cheaper as everything is the same price so we are not going to gain anything and we are not going to be able to rent as rentals are around the same price as repayments so the amount of stress it added was definitely sleepless nights.”

Jason and Emma Ross thought buying their own home might be impossible at one stage. Picture: Supplied

The Gold Coast couple purchased their four-bedroom home for $500,000 back in 2017 and Jason said they were “lucky” to even be able to get into the property market.

“The only way we were able to get it is my wife and I were renting when we were first together for a couple of years and we were trying to save and couldn’t get anywhere,” he explained.

“My father went away for six months overseas and we were able to live in his house and put the funds together for six months and save a deposit.

“We were super excited to buy our home. It was something that we didn’t think we would be able to obtain for a while but once we did it was definitely a sigh of relief and we were extremely excited to get into something that we could call our own as it’s obviously the Australian dream.

“It felt like my wife and I had been working flat out and actually gotten to the goal.”

Jason works in sales and customer service while his wife is a paramedic, and with their fixed rate due to expire they have reached out to a mortgage broker, who has assured the couple they can get them a lower rate than 6.3 per cent.

Emma and Jason Ross are concerned they might have to take on extra work to make their new mortgage repayments. Picture: Supplied

The 37-year-old said a lower rate would be a relief but the family will still need to cut back on expenses, although he admitted that would be difficult.

“There is not much more you can trim the fat off – that’s the hard thing about it,” he added.

“It might come down to extra overtime from my wife or possibly an extra job for me, but we have to bring into consideration the two kids as we don’t want to have work tooth or nail all the time and not spend time with the kids.”

He said families being slammed with interest rate rises was “disappointing” as the cost of living is already making things tough with rising prices from electricity to food.

“The fact they are putting on extra rate rises means most families are going to be in my sort of situation where you are almost doubling their actual payments over this short period of time and so many people are coming off this fixed rate like I am,” he said.
“I can see so many people who are going to be losing their homes or not going to be able to actually put food on the table so it’s a lot of stress. Unfortunately the cost of living is going up so much and the wages aren’t following and that’s the saddest thing about it.

“Everyone is in for a tougher time with the way things are going – I feel for everyone out there.”

The family said the rising cost of fuel, electricity and food has already been hard as well as paying childcare fees. Picture: Supplied

Jason and Emma are one of 800,000 mortgage holders in Australia who are facing a ‘mortgage cliff’ as they roll off ultra low fixed rates, according to the Reserve Bank, with one fifth of loans seeing their fixed rates ending this year.

Interest rates have risen from a record low of 0.1 per cent to 3.1 per cent since May last year and are tipped to go up to 3.35 per cent on Tuesday, the fastest tightening cycle in a generation – despite the RBA boss saying hikes would not start until 2024.

With predictions rates could go as high 3.6 per cent or more, the RBA’s own internal research showed the level of stress this would place on homeowners.

It revealed 15 per cent of all homeowners on variable mortgage rates would see their spare cash flow turn negative — meaning they wouldn’t earn enough money to cover the mortgage let alone buy food.

Philip Lowe, governor of the Reserve Bank of Australia (RBA), was forced to apologise after his board said rates wouldn’t go up until 2024. Picture: Brendon Thorne/Bloomberg

Mortgage Choice broker Matt McGrath, who is helping the Ross family, recommended that people start to look at their options about three to four months before the end of the fixed term to start planning their next steps.

“Be careful not to act before your fixed term ends as your lender may charge early exit or ‘break’ fees,” he said.

“You may need this amount of time to understand your current position, research potential broker or lender alternatives, and compare your options. You may also need property valuations conducted and this all takes time.”

800,000 Aussies are coming off their fixed rates. Picture: NCA NewsWire / Brendan Read

Mr McGrath advised people to seek advice and chat with an expert as “banks are currently fighting for your business” including offering discounted variable rates, cash rebates and incentives, with offering up to $4000 to refinance.

“It is important that you take the time to understand what your interest rate will be reverting to at the end of the fixed period and what fixed rate offerings are available with your current lender,” he said.

“Your broker might be able to negotiate reduced rates for you and/or compare what your current lender has offered against what is currently in the market. It is important that you understand your current position first in order to then have a benchmark to compare.”