Owners cut back and brace for interest rates pain

A Sydney family of four is gearing up to pay thousands more in monthly repayments as their fixed-term home loan is set to expire, with 800,000 other households in the same boat.

Lauren and Craig are just one of the many households set for major mortgage repayment shock, with the Sydney family already cutting back and seeking financial advice to brave the hikes ahead.

Like 800,000 other households across the country, the couple are about to roll off their fixed-rate home loan and shift to hefty variable rates, meaning higher mortgage repayments for the four-bedroom Cronulla home bought in June 2021.

The couple’s loan had originally been split between fixed and variable rates with 76 per cent fixed, meaning a major change to their monthly repayments.

“It’s going to be difficult, I think we’re really going to have to review our budget because I’ve got a fairly sizeable fixed one,” Lauren said. “I would think … given each rate rise it’s going to be a big jump,”

The pair have two teenage children, Ryan, 17 and Saige, 13, meaning the transition will prove a balancing act of repayments and cost-of-living pressures.

“We’re cutting back on groceries and just watching what we spend from week to week, really. We’ve got two children so we have to watch what we spend with them,” Lauren said.

Evalesco director and lending specialist Jules Knox has been providing financial advice to the couple for about 10 years and said she has been able to soften their shock. “Lauren and Craig settled on their home in Cronulla in 2021. Given the ‘Covid special’ fixed rates on offer … as part of the Covid stimulus measures, we suggested they look at fixing some of their home loan,” Ms Knox said.