Homeowners to feel interest rate pain as Labor keeps on spending

Today’s 0.25 per cent interest rate rise by the Reserve Bank of Australia (RBA) is another blow to Australians paying off their homes and shows the folly of Labor’s inflationary stimulus spending, said Senator Marise Payne, Shadow Minister for Housing.

“Australian homeowners are already paying record amounts of their disposable incomes on servicing mortgages and this rate rise means more hip-pocket pain,” Senator Payne said.

“A homeowner paying an average mortgage of $301,205 at a standard variable rate of 7.4 per cent will have to find an extra $52 per month to cover the principal and interest repayments, in addition to electricity prices having gone up 35 per cent since the end of 2007, gas prices by 24 per cent, water prices by 29 per cent and rents by 15 per cent.

“Those repayments could be even higher if the banks lift their rates above and beyond the RBA’s 0.25 per cent.

“The rising cost of finance will also affect the price of materials for builders, which will then be passed onto new homebuyers.

“The Rudd-Gillard Government has continued its wasteful spending even after the worst of the global financial crisis is behind us.

“This is the seventh time rates have risen on Labor’s watch since October 2009 and all Treasurer Wayne Swan can do is plead with the banks not to increase their rates beyond the RBA cash rate, even while his government continues running up debt and competing for funding with the banks.

“Labor clearly has its foot on the accelerator while the Reserve Bank is hitting the brakes.”