Sydney family struggling to pay $110k mortgage after 10 interest rate rises

A Sydney family are cutting back on subscriptions, shopping at Aldi and selling their Lexus for cash as their mortgage is set to double.

An Australian man is knuckling down as his mortgage repayments are set to double by June this year to an eye-watering $110,000.

Steven De Celis owns a $2 million home in the plush Sydney harbourside suburb of Haberfield but is haemorrhaging cash as interest rates continue to rise.

On Tuesday, the RBA handed down their decision for April, revealing that they had paused interest rates for the time being.

Even so, Mr De Celis, 44, is drowning in debt and could soon fall off a mortgage cliff.

When he first purchased the house at the peak of the property boom in June 2021, his yearly repayments sat at $69,000.

But now, following 10 consecutive interest rate rises, and with his fixed mortgage rate set to expire in June, that amount will jump drastically to $110,000.

The family, who have three young children, have had to sell their Lexus and he’s cancelled regular outings to restaurants on date nights with his wife in preparation.

Steven De Celis works in IT.

Mr De Celis is dreading June, when his entire loan will be on a variable rate.

“I’m going to get absolutely slammed,” Mr De Celis told The Australian Financial Review

Of his home loan, $400,000 is currently on a variable rate of 5.5 per cent. The rest is at a fixed rate but will be transferred over to the 5.5 per cent rate in June.

However, some of Australia’s big four banks think there is still a way to go with rate rises, forecasting that the cash rate won’t be terminal until at least May.

The struggling couple earn big bucks, with Mr De Celis in IT and his wife Rachel a banker at ING, but it’s not enough to keep their heads above water with the cost of living crisis.

They sold their Lexus for $52,000 but still have another car.

Instead of driving to work, Mr De Celis is taking the bus. At the same time, they now exclusively shop at Aldi rather than Woolworths.

They have also cancelled their Foxtel subscription.

The family are also reining in their luxury overseas holidays and have resorted to small long weekend trips in Shoalhaven or Port Stephens.

The couple bought at the height of Sydney’s property craze. File photo. Picture: NCA Newswire / Gaye Gerard

If a homeowner is paying more than 30 per cent of their after-tax income to their bank to pay off their home loan, then they are considered to be in mortgage stress.

New Canstar research released on Tuesday found that the average household living in Sydney would need to earn a whopping $239,480 per year to be able to comfortably afford repayments on their home.

The median Sydney house price $1.2 million would require a deposit of $246,000 resulting in monthly repayments of $5985.