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‘We never would have bought’: Australian mortgage holders feel the pain as interest rates rise again (www.theguardian.com)

submitted 23 hours ago by hanrahan@slrpnk.net to c/ausfinance@aussie.zone

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They have decided to sell their newly finished home and pivot to the tiny house movement due to “cost of living and lack of freedom”.

“Humans are not meant to live this way,” she says. “It’s causing a cascade of issues, health issues, a mental health crisis and the fact that so many people aren’t having kids because they simply can’t afford it.”

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[–] Taleya@aussie.zone 5 points 18 hours ago (1 children)

fr. We bought in '22 and we padded out our budgeting by taking the monthly mortgage payments, rolling that up to the nearest thousand (eg: 2000 instead of 1700 [not actual numbers!!]) and putting that into our offset account per month. Because we fully expected to take it up the arse.

Consequently there's been no fuckin' change to the payments we throw in there.

[–] CameronDev@programming.dev 4 points 12 hours ago (1 children)

I've been doing the same, and it really is the way to go. Haven't had much in the way of holidays or anything else expensive, but my house will be paid off by next year if all goes well.

Money sitting in the offset is also earning at the same rate as your mortgage interest rate, which is pretty good compared to term deposits or savings accounts.

[–] Taleya@aussie.zone 2 points 12 hours ago (1 children)

Oh man, you get offset interest? We don't. But it has been satisfying watching it drop our tital loan for interest payments as it grows

[–] CameronDev@programming.dev 3 points 11 hours ago* (last edited 8 hours ago)

No, but by the nature of offsetting your loans interest, it works out about the same. Every dollar in your offset is saving you from paying 5% on a dollar you owe on the loan.

To use silly numbers, if you have a loan at 5% for $100, and a savings account at 2%, at the end of a year, your down $5 on the loan, and up $2 on the savings. If instead you have $100 in your offset, your down $0 on the loan, so your offset has functionally earnt at 5%.