‘Breathing room’: Rate cut means Sarah can ‘splurge’ on Easter eggs this year
For Renuka Senthevadiel, a single mother living and working in south-west Sydney, saving $100 a month could be the difference between taking her son to the cinema or sticking to her strict budget.
“I am very excited and relieved. It just gives me a bit of breathing room … I’m less anxious about the next few months,” she said.
Single mother Renuka Senthevadiel says the RBA’s rate cut will allow her to afford to take her son to the cinemas.Credit: Steven Siewert
“It allows me to save for my emergency fund, have a bit of a buffer, maybe do something for the two of us that we enjoy. We love going to the movies so doing a one-off treat like that is amazing.”
Senthevadiel bought her Cabramatta home eight years ago and shopped around for a mortgage with a better interest rate. She doesn’t think she’d be able to afford to buy a home now and is saving for her son, who she thinks will need her financial help to become a home owner.
“I’m hoping that me having a mortgage will mean that at some point I can secure my son to have a space in the Sydney property market, because it would be impossible for him to ever do that [on his own].”
The nation’s four major banks, Westpac, National Australia Bank, ANZ and the Commonwealth Bank of Australia, have announced that they will pass on the rate cut in full to mortgage holders from February 28.
Flora Grant and her wife Liz Astey bought their dream Newtown terrace in 2021. Once little Franklin came along, the pair soon realised that they needed to upgrade.
Flora Grant (right) with wife Liz Astey and baby Franklin welcome the news of a rate cut as they transition to a larger family home.
“We’re in the process of selling and buying, so it actually gives us a lot of confidence that that’s hopefully the first cut, and that rates will be on their way down overall … [it] makes us feel confident to be taking out a new mortgage,” Grant said.
Grant, who was also on maternity leave while interest rates were at their peak, said hopefully the rate cut would prove an incentive for buyers so her family can swiftly transition into a new, larger home.
“The reality of having a family means you need more space, and so we knew that a rate cut would be coming this year at some point, but we weren’t confident that it would happen in the first half of the year.”
Treasurer Jim Chalmers said the rate cut was “very welcome” for millions of people.
“Now, we know that it won’t fix every challenge we have in our economy and household budgets, but it will help,” he said at a press conference in Canberra on Tuesday.
Jordon Le Breux, 26, who is one year into repaying the mortgage on his investment property in Sefton in Sydney’s west, welcomed the rate cuts “with open arms”.
Jordon Le Breux is a 26-year-old who has just bought into the Sydney property market.Credit: Steven Siewert
“Every month when my repayments come through, I am always very fearful that I have enough money. This obviously gives me a lot more confidence,” he said.
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Le Breux still lives at his parents’ home, and while he considers himself “lucky” compared to his peers who have moved out earlier than him, his ultimate goal is to buy a family home closer to the city.
“[A rate cut will mean] a bit more reassessing my goals … I can either reinvest in some property, either make additional repayments, or take advantage of lower cost of borrowing.”
