Interest rate hikes spoil Christmas plans

One in 10 homeowners have canned their Christmas holiday plans as a result of the most recent interest rate hikes.

An online survey by mortgage broker Loan Market also found that almost two-thirds of respondents were reassessing their spending due to higher mortgage repayments.

Loan Market’s chief operating officer Dean Rushton said four official rate hikes by the Reserve Bank of Australia (RBA) in 2010 had had a major impact on economic activity, especially in the retail sector which was desperate for improved trade this Christmas.

‘Many Australians are struggling with the cost of everyday goods as well as services such as power and water, and they needed some interest stability,” he said.

Unsurprisingly, 35 per cent of the 452 respondents to the survey said the RBA and banks had “turned Santa into Scrooge”.

Seventeen per cent said they would be cooking up sausages on the barbie rather than prawns or other festive treats.

However, 38 per cent said it would be “Christmas as usual”, despite the increase in mortgage repayments.

In some sort of consolation, financial markets are pricing in virtually no chance of another increase when the Reserve Bank board meets on December 7, its last meeting until February 2011.

Source: AAP and


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