South Aussies’ rejoice as interest rates drop for first time in four years

Communities across SA popped the champagne and celebrated the RBA finally cutting interest rates after four long years of savings and sacrifices. Read their stories.

Scores of South Australians rejoiced in the RBA’s announcement to cut interest rates for the first time in four years, ending a lengthy period of sacrifices and savings for families across the state.

The Advertiser spoke with a number of these families to hear about their struggles over the past four years as interest rates rose to the highest level since December, 2011.

South Australians Jonathan Caruso and his fiancee Natasha Manuele spent their Tuesday anxiously awaiting news from the RBA to see if it would “bring hope” or cast “a dark shadow”.

Natasha Manuele and Jonathan Caruso hope the cut in interest rates will mean they can enter their new-build home sooner. Picture: Tim Joy

The pair, 31 and 29 respectively, bought a block of land for about $500,000 at Daw Park before interest rates started to climb in 2022.

With an increase in interest rates of 4.25 per cent since April 2022, the Caruso’s planned completion date for the build blew out from one to two years, to two to three years.

While they are able to finish the build this year through Regent Homes, the blow out meant — due to requiring additional financing for the build — their mortgage doubled to about $1000 a week.

Fortunately, the rate cut opened the door for more financial flexibility, Mr Caruso said — and a monthly saving of about $100 on mortgage repayments.

Mr Caruso said the rate cut gives him and his fiancee “hope”. Picture: Tim Joy

“Lower mortgage repayments would give us more financial flexibility, the money could go towards quality of life, savings, investments,” he said.

“It also just helps our confidence as well as property owners. — it gives us hope.”

Before the cut, Mr Caruso said he and his partner were forced to cut back on the things they loved, like going out and enjoying a nice meal.

“We like to go out to eat and we have definitely had to cut back and be more mindful of our weekly discretionary spending,” he said.

“As they (rates) increased we had to cut back on some of that personal spending and put it towards mortgage repayments.”

Hoping to have kids in the coming years, Mr Caruso said interest rates were very much in the conversation, but the cut meant he and his partner were hopeful for the future.

Jane Russo was relieved to see interest rates reduce. Picture: Dean Martin

Former singer turned business owner Jane Russo, 52, also had her “fingers crossed” for a rate cut on Tuesday afternoon.

The Highgate single-mother said rapid interest rate rises coupled with a cost-of-living crisis had forced her to make plenty of sacrifices over the last few years.

“Interest rates went up so quickly, it really threw me,” Ms Russo said.

“I would constantly watch the news each month to see if it would go up — it was quite scary.”

Ms Russo said she had always been diligent with her bills and never incurred large debts.

“All of a sudden I had to seriously budget and focus on essentials,” she said.

“Being a single mother and business owner, the first thing I cut back on was expenses for myself.

“So I sacrificed purchasing new clothes, eating out, haircuts, and even my gym membership.

Ms Russo said she had made a number of sacrifices to keep up with interest rate rises. Picture: Dean Martin

Ms Russo is set to save about $92 in interest repayments.

She said she appreciates the extra cash, but it would not change things “dramatically”.

“Cost of living is tough — even though we’re getting a little bit back on the mortgage repayments, everything else has gone up,” she said.

“Thankfully we’re finally starting to turn in the other direction.”

Rachel Morgan in Wynn Vale was glad to see the rates cut, but said the $77 a month in savings was still not enough.

The 36-year-old mother of two daughters said she and her husband had cut out luxury items from their family budget, including trips to the footy.

“We had to cut our daughter’s swimming lessons and we’re certainly not eating out as much.

“We save every little bit of money we can.”

The main change for the Morgans after Tuesday’s announcement was they could start paying off more principal on their home loan.

“We otherwise won’t really notice (the extra savings) because everything else has gone up and wages are staying the same,” she said.

Liz DeLaine and Peter Leske, at their unit in Largs, cracked the champagne on news that the Reserve Bank has finally made a cut to the cash rate. Picture: Dean Martin

Largs North husband and wife Peter Leske and Elizabeth de Laine, both 56, celebrated the rate cut following a few years of sacrifices.

“We didn’t have our honeymoon for two-and-a-half years as we prioristied paying off the mortgage,” Mr Leske said.

Ms de Laine also sold her new car and downsized to a smaller second hand car, while Mr Leske delayed replacing his ageing Suzuki Swift.

“I’d like to see a 0.75 per cent cut before we were feeling more confident and could spend money on things that are a bit more fun rather than just essentials,” he said.

Mr Leske and Ms de Laine will save about $25 from the recent rate cut.

Originally published as South Aussies’ rejoice as interest rates drop for first time in four years