‘The banks always win’: Aussies struggle to muster up excitement over rate cut

After four gruelling years, the RBA has finally handed down a much-needed rate cut, but the response from everyday Aussies says it all.

After four gruelling years, Aussies have finally received a much-needed rate cut, but you only have to walk the streets of Sydney to realise that people aren’t feeling optimistic, or even relieved.

The Reserve Bank announced yesterday that rates had been dropped from 4.35 per cent to 4.10 per cent. The big banks quickly followed suit and announced they would all cut their home loan rates by 0.25 per cent.

RBA boss Michele Bullock warned Aussies to be “patient” while acknowledging that mortgage holders are still “hurting” right now.

“I understand you are hurting, and I understand mortgage rates have increased a lot … but we need to get inflation down because that is the other thing that is hurting you,” she said.

Despite the good news, in Sydney’s inner west, Aussies didn’t feel like celebrating.

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The general vibe was that the cut wasn’t enough to solve anything, whether you’re feeling mortgage stress or fed up with paying high rent.

One man stopped to chat to news.com.au and sighed when asked about the recent interest rates.

“What hope does anyone have?” he asked.

The Sydney resident said that he had a mortgage and, while he was happy to hear rates were coming down, at this point, it just felt like too little, too late.

RBA boss Michele Bullock said inflation still needs to go down. Picture: NewsWire/ Monique Harmer

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He explained that the decrease wouldn’t make up for years of mortgage stress and was not enough to make him feel more optimistic about the future.

“What about my niece and nephew? All their money goes on rent, and they’ll never be able to afford to buy,” the homeowner said.

The man declined to be pictured, but the sentiment of his words echoed throughout the afternoon as dozens of Aussies expressed their general dismay about the housing crisis.

She gets help from her parents to pay rent. Picture: news.com.au

Young Aussies worry they'll never be able to buy. Picture: news.com.au

One woman explained she didn’t think the rates even applied to her because she’s a renter. When news.com.au explained that rates could impact renters, for example, a landlord might lower their rental prices if the mortgage on their investment property wasn’t so expensive, the young woman didn’t even seem prepared to acknowledge the idea that housing could ever become more affordable.

“It would be amazing if that was true,” she said.

The young people who stopped to chat all had a very similar response; rates aren’t particularly interesting to them because they aren’t even sure they’ll ever be able to buy.

One woman explained that rent is so expensive that her parents are helping her cover it, which is hardly a ringing endorsement of the current housing situation.

She said the rate cut was ‘disappointing’. Picture: news.com.au

The Newtown local said he is in mortgage stress. Picture: news.com.au

Another woman in fabulously oversized sunglasses said she found the rate cuts “disappointing”, even though she’s in the lucky position of having already paid off her mortgage.

“They should go lower,” she said.

“People are struggling, particularly people living in units, because they’ve got levies costs,” she said.

The homeowner said she believes the rates need to go down to 3 or 2.5 per cent to create any real relief and it is a rate she thinks is more than reasonable.

“It shows that by the profit the banks have made that it is fair,” she said.

Similarly, another man and local business owner said the rate decrease would save him around $25 a week.

“It is a pittance,” he said.

“I am in mortgage stress by the true definition, but I am still making it work, but I’m just not able to save.”

The Newtown local said that, in five years, he has only paid off around seven per cent of his overall loan.

“It is all set up for the banks. The banks always win,” he said.

Aussies are just plain exhausted by the housing crisis. Picture: iStock

Finder’s financial expert Graham Cooke said that, despite the rate cut, many mortgage holders are still in a “difficult position” and won’t be feeling relieved.

“This rate cut is a lifeline for millions of Australians teetering on the edge of mortgage default, but for some, it may be too little, too late,” he explained.

“While this rate drop provides some relief, many households will still need to make tough financial decisions to stay afloat.”

The financial expert said that millions of homeowners are still going to be “struggling” to make repayments and the financial pressure is still on.

Mr Cooke recommended that Aussies shop around to get a better deal on their home loan, as rates have been cut.

“Shop around to find a variable home loan that offers a lower interest rate than your current provider. The very lowest rates now have a ‘5’ in front of them,” he said.

“By deliberately putting those savings back into the mortgage, you could make a significant difference in the amount of interest you pay over the life of the loan.”