‘Everyone is feeling the pain’: Interest rate hike hits Sydney hard

The increase of Australia’s official interest rate to 4.85 per cent was not unexpected, but for many in western Sydney, it still felt like a gut punch.

The Reserve Bank of Australia’s rate rise, announced on Tuesday, is the country’s highest since the global financial crisis. In Parramatta, there’s a shared feeling of frustration: some are angry about it being the fifth increase this year, and many are worried about how it will affect mortgage repayments and the cost of living.

“I think it’s just crippling people that have mortgages,” Zara said, sitting in Parramatta Square. “Why should we be the only country that has five interest rate increases in a year?”

The increased interest rate adds about $100 in repayments a month to a 30-year $600,000 mortgage. For apartment owner Ayesha Kamal, this rate rise will affect every aspect of her and her family’s life.

“Now I think I’ll be paying $100 extra for a month, which I could have spent on my kids. So I have to cut down from their budget, which is not fair,” she said.

“There’s no sign of [interest rates] slowing down or going down. It’s of course worrying, and the price of every grocery and everything is going up. It impacts everything.”

When asked how she thinks this rate increase will impact most Australians, Kumar doesn’t hesitate in her response: “Everyone is feeling the pain.”

The announcement came just before the Melbourne Cup on Tuesday. For Parramatta workers Parag Bhagat, Rajbabu Rajendran and Jagan Sampath Kumar, it’s clear the rate rise put a damper on their excitement for the race.

Bhagat, a mortgage holder who also has an investment property, said the rise will have a big impact on his life.

“We were just discussing there are no buyers as well … sellers don’t have a choice. So as an investment [property owner], my tenant moved out, and I’m not finding a tenant,” he said.

“So, it’s what to do? I have to bear the cost for next ... I don’t know how long.”

The hike has hit them, like many Sydneysiders, hard, with Rajendran describing it as “definitely not good”.

“We have to take it – we have to accept it at this point,” he said. “It’s really hard, and planning things, everything again. We have to replan most of the things in time.”

The trio agree they’ve had to cut back on expenses such as dining out or hotel stays to budget for the additional costs caused by the rate increase.

“That makes you more nervous because we don’t know what [will happen] tomorrow and whether it’s going to come down, whether it’s going to keep going up,” Bhagat said. “Nobody knows.”