Melbourne family makes big sacrifices to keep a roof over their heads amid interest rate hikes

A Wyndham Vale homeowner has had to surrender a number of things to keep from selling his family’s home. But that could all change with an impending rate cut.

Muthu and his family have made significant financial sacrifices to pay their mortgage repayments since interest rates skyrocketed. Muthu Mahesh and his daughter Ashwa. Picture: Jake Nowakowski

Muthu Mahesh was forced to cancel his kids’ music lessons to save his family from losing their home when interest rates skyrocketed.

The IT professional purchased a block of land in Wyndham Vale in 2019 and built a house when interest rates were around 2-3 per cent.

Mr Mahesh said the impact of his interest rate gradually rising to 6.3 per cent had been significant, and even after refinancing in 2022 his family had to make many sacrifices.

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“It was super hard, I’m still having hardship,” he said.

“Hopefully the rate cut is going to help me with some dollars.”

Muthu and one of his daughter’s, Ashwa.

He added that his wife ended up going back to work four days a week as his family couldn’t survive on just one income anymore.

“If my wife didn’t work, then I would have ended up selling that property,” he said.

“Things were a lot different up until 2020 because just my salary was enough for the whole family to be comfortable.”

Mr Mahesh said his kids used to be enrolled in a number of extra-curricular activities like chess club and music classes.

“Now because of all this, I have had to stop all those extra activities,” he said.

“If I’m getting extra dollars from a rate cut, definitely I would like my kids to resume their activities.”

15 Garvan St, Wyndham Vale is listed with a $590,000-$649,000 price tag.

The median house price in Wyndham Vale is $580,000 with monthly mortgage repayments of $2860.

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However, Australian Housing and Urban Research Institute (AHURI) Dr Michael Fotheringham said a single rate cut wasn’t going to dramatically ease pressure for many mortgage holders who were feeling the pinch.

“The cost of land and the cost of housing in Australia is enormously overcapitalised and the treatment of housing as … an investment asset ahead of shelter for families remains a problem,” Dr Fotheringham said.

“And it’s going to continue to be pretty expensive to get into home ownership for some time to come.”

But he said a series of interest rate drops could encourage some households to engage with the property market after feeling priced out over the past few years.

“But the impact is more psychological than financial for many people,“ he said.

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Originally published as Melbourne family makes big sacrifices to keep a roof over their heads amid interest rate hikes