Modanville resident Cheryl Nilon with her three children (from left) Jackson, 12, Kaitlyn , 4, and Josh Robinson, 8, in the Lismore CBD yesterday. The single mum says another mortgage rate rise on her home would make life a struggle.
Modanville resident Cheryl Nilon with her three children (from left) Jackson, 12, Kaitlyn , 4, and Josh Robinson, 8, in the Lismore CBD yesterday. The single mum says another mortgage rate rise on her home would make life a struggle.

Anxious wait for homebuyers

HOME loan borrowers and lenders are watching the Reserve Bank for clues to whether it is likely to raise interest rates a week from today.

The deputy governor of the bank, Ric Battellino, has warned that a rise is inevitable at some point, adding that homeowners in “pockets of housing stress” would be hard hit.

Of particular concern were the first-home buyers who were attracted into the market in 2009 by the increase in the first-home owner grant, he said.

“Some of these may have over-committed themselves financially in order to enter the market, and are now vulnerable to rising interest rates,” Mr Battellino said.

“The increase in indebtedness over the past 15 years does mean that households are now significantly more sensitive to changes in interest rates.”

People in the Lismore CBD used strong language when asked how a rate rise would affect them. One young shop worker said she would be “screwed” if her loan went up.

“I’ve just done a supermarket shop and I can’t believe how much I spent,” said the woman, who did not wish to be named.

Modanville single mother of three Cheryl Nilon entered a fixed rate arrangement nearly five years ago.

She would be “up the creek” when the fixed term finished if rates rose during the year, she said.

“It will be a struggle,” she said.

Ms Nilon has worked in the same job as a sales rep for 16 years and bought a house with her then partner eight years ago.

She said the price of everything – food, petrol, the children’s sporting fees – was increasing all the time, “but my wage packet isn’t”.

“Another $30 a week to keep our home means the kids are going to have to miss out on something. One of them will go without – tutoring or music lessons – I’ll have to weigh it up,” she said.

Alstonville estate agent Trevor Manwarring said the number of first-time buyers had “definitely dropped off”.

“Interest rates are squeezing them out of the market,” he said.


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