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Topics: Australia
Charisa Bossinakis
An elderly Aussie bloke says young people need to stop whining about their rising mortgage rates as they already have it ‘pretty good’.
Perth retiree Ron de Gruchy, 85, told The West Australian that the younger generation needs to ‘adjust’ to the surging interest rates rather than complain.
“The high interest rates were a real squeeze on finances but you just adjusted,” he said. “Back then, people didn't complain - they just adjusted.”
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The man also revealed he paid his mortgage by living a frugal life, which meant no travelling, partying or visiting the casino and urged youngsters to do the same.
Let me guess...no avo on toast either?
Gruchy added: “Higher interest rates are not the end of the world, but I think youngsters have got it pretty good.”
The retiree’s remarks come after The Reserve Bank increased interest rates for the first time in more than 11 years, with a 25-basis-point increase to the cash rate target climbing to 0.35 per cent.
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ABC News reports that Australians would see repayments rise to AU $65 a month on a $500,000 loan and double for a $1 million dollar loan.
Reserve Bank Governor Dr Philip Lowe released a statement saying that now was a good time to introduce the higher interest rates as wages increase.
"The Board judged that now was the right time to begin withdrawing some of the extraordinary monetary support that was put in place to help the Australian economy during the pandemic," he said.
"The economy has proven to be resilient and inflation has picked up more quickly, and to a higher level, than was expected. There is also evidence that wages growth is picking up.
"Given this, and the very low level of interest rates, it is appropriate to start the process of normalising monetary conditions."
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Following Lowe’s decision, four of Australia’s biggest banks have also announced they would adopt the interest rate increase.
9News reports that the Commonwealth Bank said the 0.25 per cent increase in home loans would commence on May 20.
ANZ also said they would enforce the cash rate rise from May 13 and offer support for those ‘doing it tough’.
ANZ Group Executive Australia Retail Maile Carnegie said of the change: "While this change will impact customers in different ways, home loan customers are generally well placed to manage rising rates with around 70 per cent of accounts ahead on repayments – many of them by two years or more.
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“Household and business deposits are also at record highs."