1 00:00:00,920 --> 00:00:02,880 Speaker 1: This is jam nation with Jones. 2 00:00:04,360 --> 00:00:06,880 Speaker 2: Well, yesterday the Reserve Bank raised it's interest rate from 3 00:00:06,920 --> 00:00:09,720 Speaker 2: point from zero point five percent to zero point eight 4 00:00:09,760 --> 00:00:11,680 Speaker 2: five percent. As we said, it's the biggest increase in 5 00:00:11,680 --> 00:00:15,040 Speaker 2: twenty two years. This will impact many across Australian Life's 6 00:00:15,040 --> 00:00:17,000 Speaker 2: getting more expensive by the day. But it's not the 7 00:00:17,040 --> 00:00:20,479 Speaker 2: rate rises. It's inflation, it's petrol prices, it's groceries, it's everything. 8 00:00:21,120 --> 00:00:24,120 Speaker 2: Financial Guru, if his hoss is on, is on hand 9 00:00:24,400 --> 00:00:26,040 Speaker 2: to help us make sense of all this. 10 00:00:26,560 --> 00:00:30,200 Speaker 1: Effie, Hello, good morning, Amanda, and Jaint Hello. 11 00:00:29,960 --> 00:00:30,960 Speaker 3: Hellofy Hello. 12 00:00:31,040 --> 00:00:32,599 Speaker 2: I mean this is a big deal, isn't it. Say 13 00:00:32,640 --> 00:00:34,800 Speaker 2: for the average owner occupy with a half a million 14 00:00:34,840 --> 00:00:37,280 Speaker 2: dollar mortgage, just saying those words out loud as extraordinary. 15 00:00:37,320 --> 00:00:39,520 Speaker 2: But that's what living in Sydney is. A rate high 16 00:00:39,520 --> 00:00:42,599 Speaker 2: will see a monthly repayment rise by a further one 17 00:00:42,720 --> 00:00:44,600 Speaker 2: hundred and thirty three dollars. 18 00:00:45,280 --> 00:00:48,240 Speaker 1: Yeah, look, it is a huge It is a shock. 19 00:00:48,360 --> 00:00:51,600 Speaker 1: I mean they were predicting either point twenty five point four. 20 00:00:51,680 --> 00:00:53,520 Speaker 1: I thought they would come out aggressive. If I thought 21 00:00:53,520 --> 00:00:56,560 Speaker 1: point four, I was shocked when I saw that point 22 00:00:56,600 --> 00:00:59,200 Speaker 1: five Amanda. But I mean, I guess we've got to 23 00:00:59,280 --> 00:01:03,360 Speaker 1: kind of understand what the RBA situation is and to 24 00:01:03,400 --> 00:01:06,559 Speaker 1: be frank as a homeowan. If you're a homeowner getting 25 00:01:06,600 --> 00:01:08,920 Speaker 1: a new homelan you just recently got one, you'd be 26 00:01:08,959 --> 00:01:11,000 Speaker 1: pretty angry with them because it wasn't too long ago 27 00:01:11,040 --> 00:01:14,720 Speaker 1: where they said, hey, no rate hikes until twenty twenty four, 28 00:01:15,200 --> 00:01:19,120 Speaker 1: and here we are seeing huge rate hikes. The thing is, 29 00:01:19,360 --> 00:01:21,160 Speaker 1: let me try and put this in perspective, because there 30 00:01:21,240 --> 00:01:24,160 Speaker 1: is a lot of concern and worry, and rightly so. 31 00:01:24,800 --> 00:01:27,760 Speaker 1: But these two rate hikes represent about one point seventy 32 00:01:27,760 --> 00:01:31,240 Speaker 1: five percent hike. So who's going to fill the pinch 33 00:01:31,319 --> 00:01:34,520 Speaker 1: or who's not. Rather so, if you're an existing homeowner 34 00:01:34,560 --> 00:01:37,640 Speaker 1: that's never changed your payments, which is quite likely because 35 00:01:37,640 --> 00:01:40,039 Speaker 1: the bank would not tweak them unless you ask for it. 36 00:01:40,360 --> 00:01:42,360 Speaker 1: With all those rate cuts we have, you're in front 37 00:01:42,400 --> 00:01:44,840 Speaker 1: of your mortgage. You've got some bytime. If you're in 38 00:01:44,880 --> 00:01:46,640 Speaker 1: a fixed rate, you're going to get a rude shop 39 00:01:46,680 --> 00:01:49,400 Speaker 1: when that actually finishes. So now's the time to start 40 00:01:49,440 --> 00:01:52,600 Speaker 1: thinking about what happens on my fix show expire. If 41 00:01:52,600 --> 00:01:56,000 Speaker 1: you're a new customer, the bank should have really assessed 42 00:01:56,000 --> 00:01:58,360 Speaker 1: your loan with a three percent margin, so if you've 43 00:01:58,400 --> 00:02:01,040 Speaker 1: got a rate at two percent, they should have calculated 44 00:02:01,080 --> 00:02:02,640 Speaker 1: it at five percent, so you've got a bit of 45 00:02:02,680 --> 00:02:05,960 Speaker 1: a buffer. But here's the problem, as you point out, Amanda, 46 00:02:06,240 --> 00:02:08,840 Speaker 1: we have been spending on the cost of living, buying 47 00:02:08,840 --> 00:02:11,160 Speaker 1: a car. Maybe you know, we've spent quite a lot, 48 00:02:11,639 --> 00:02:14,680 Speaker 1: and that actually is putting us in a really type situation. 49 00:02:15,080 --> 00:02:17,240 Speaker 1: I mean, a credit agency I was talking to yesterday 50 00:02:17,360 --> 00:02:21,440 Speaker 1: said personal owns are in arrears, nine percent of them 51 00:02:21,480 --> 00:02:25,400 Speaker 1: are behind in repayments, and half the minion homos have 52 00:02:25,520 --> 00:02:28,320 Speaker 1: personal loans. So we're in a situation where we may 53 00:02:28,360 --> 00:02:30,360 Speaker 1: have been okay when we got the loan last year, 54 00:02:30,520 --> 00:02:32,520 Speaker 1: but we've since wrapped up a whole lot of debt, 55 00:02:32,800 --> 00:02:35,400 Speaker 1: sometimes not our fault, sometimes our own fault, and we're 56 00:02:35,440 --> 00:02:37,480 Speaker 1: now in this situation where or what do I do? 57 00:02:38,000 --> 00:02:38,160 Speaker 3: Right? 58 00:02:38,240 --> 00:02:39,040 Speaker 2: And indeed you do? 59 00:02:39,280 --> 00:02:39,840 Speaker 3: What do you do? 60 00:02:40,400 --> 00:02:43,760 Speaker 1: Yeah? Well, look Westpac has moved. I haven't seen any 61 00:02:43,800 --> 00:02:46,280 Speaker 1: more this morning. I had a quick look. Look, they're 62 00:02:46,320 --> 00:02:48,400 Speaker 1: bound to increase. Let let's not kill ourselves. Of course 63 00:02:48,400 --> 00:02:50,240 Speaker 1: they are. Are they all going to move by the 64 00:02:50,280 --> 00:02:54,120 Speaker 1: same amount. Here's some positivities. Normally, when rates go up, 65 00:02:54,160 --> 00:02:56,160 Speaker 1: banks get slammed because it's like, yes, they're going to 66 00:02:56,200 --> 00:02:58,880 Speaker 1: increase their profit margins, and they will, but guess what 67 00:02:58,919 --> 00:03:01,440 Speaker 1: will happen also, we won't be buying as much, so 68 00:03:01,520 --> 00:03:04,000 Speaker 1: their loan book will close. And we're already seeing that 69 00:03:04,080 --> 00:03:06,799 Speaker 1: home loan lending is falling. So what does that mean? 70 00:03:06,919 --> 00:03:10,000 Speaker 1: They're finally going to be looking at existing tuck leaves 71 00:03:10,000 --> 00:03:12,240 Speaker 1: because they don't want them to move. So what's going 72 00:03:12,320 --> 00:03:15,520 Speaker 1: to be hot right now is refinancing the cheapest rate 73 00:03:15,560 --> 00:03:17,280 Speaker 1: out there. I can see now if for variable is 74 00:03:17,320 --> 00:03:20,040 Speaker 1: one point eight three, the cheapest two year is at 75 00:03:20,120 --> 00:03:22,760 Speaker 1: three point nine. Now, these rates could change for the 76 00:03:22,760 --> 00:03:24,919 Speaker 1: time I hang up with you, guys, but the point 77 00:03:25,120 --> 00:03:27,920 Speaker 1: is these are rock bottom rates. So if they do 78 00:03:28,040 --> 00:03:29,839 Speaker 1: go up, at least it gives you some buy time. 79 00:03:30,400 --> 00:03:32,399 Speaker 1: The other thing, if you haven't done this, and which 80 00:03:32,440 --> 00:03:34,520 Speaker 1: I have done personally, is it's going to be a 81 00:03:34,520 --> 00:03:37,800 Speaker 1: boring weekend for you guys. I'm sorry. If you print 82 00:03:37,960 --> 00:03:40,920 Speaker 1: out your statement. We live in a digital world. You've 83 00:03:40,960 --> 00:03:44,280 Speaker 1: got a digital footprint. Highlight all your regular bills. So 84 00:03:44,360 --> 00:03:46,200 Speaker 1: I went and had a look. If I move my 85 00:03:46,320 --> 00:03:50,400 Speaker 1: regular bills from average to the cheapest on my homelan 86 00:03:50,520 --> 00:03:52,880 Speaker 1: and say a credit card on home and contents, insurance, 87 00:03:52,920 --> 00:03:56,840 Speaker 1: my car insurance, my hospital, electricity, and NBN. I could 88 00:03:56,880 --> 00:03:59,360 Speaker 1: manage to save five hundred and eighty dollars per month 89 00:04:00,200 --> 00:04:04,640 Speaker 1: from average to cheapest. Wow, which actually then you can 90 00:04:04,680 --> 00:04:06,880 Speaker 1: filtering back to your mortgage, your payments. You're not saying 91 00:04:06,960 --> 00:04:11,080 Speaker 1: everyone can do that, but I am urging people to 92 00:04:11,240 --> 00:04:13,160 Speaker 1: have a look at their regular bills and say, Okay, 93 00:04:13,240 --> 00:04:16,800 Speaker 1: where can I cut to redirect? Because there's no magic 94 00:04:16,839 --> 00:04:20,120 Speaker 1: formula here, guys. Unfortunately, it's a case of that until 95 00:04:20,120 --> 00:04:22,240 Speaker 1: we get this inflation under control, the cost of living 96 00:04:22,320 --> 00:04:23,760 Speaker 1: is going to be tight. We need to find out 97 00:04:23,800 --> 00:04:26,160 Speaker 1: where else can I save some to redirect some. 98 00:04:26,279 --> 00:04:28,120 Speaker 3: And a lot of people are paying their mortgage like 99 00:04:28,360 --> 00:04:30,960 Speaker 3: I do, not using the minimum amount you have to pay. 100 00:04:31,120 --> 00:04:33,640 Speaker 3: I pay above the minimum mortgage. I've always done that, 101 00:04:33,839 --> 00:04:35,479 Speaker 3: even in the days when I didn't make much money. 102 00:04:35,480 --> 00:04:37,520 Speaker 3: I always just wanted to pay off the loan as 103 00:04:37,600 --> 00:04:40,400 Speaker 3: quick as I could. So will that affect people? So 104 00:04:40,960 --> 00:04:42,920 Speaker 3: are the people that will be affected are the ones 105 00:04:42,960 --> 00:04:45,720 Speaker 3: that are just paying off at the minimum mortgage payment. 106 00:04:46,480 --> 00:04:49,240 Speaker 1: It's a really good point, jame Zy, because some calculations 107 00:04:49,279 --> 00:04:51,039 Speaker 1: I do with can sty. I asked them, you know, 108 00:04:51,160 --> 00:04:54,400 Speaker 1: people had saved thousands and thousands over the pandemic. If 109 00:04:54,440 --> 00:04:56,280 Speaker 1: you're lucky enough, I get it. Some of us couldn't. 110 00:04:56,279 --> 00:04:58,279 Speaker 1: And in your case, you said you save some, you 111 00:04:58,279 --> 00:05:01,280 Speaker 1: would need about forty thousand dollars in your opposite will 112 00:05:01,320 --> 00:05:03,920 Speaker 1: read your account forty thousand. It is quite a bit, 113 00:05:04,200 --> 00:05:07,880 Speaker 1: but that would offset these two rate hips we just had. So, 114 00:05:08,240 --> 00:05:10,640 Speaker 1: you know, people that have not changed their attaiyments have 115 00:05:10,760 --> 00:05:13,320 Speaker 1: got some buy time. The ones that are really hurting, 116 00:05:13,360 --> 00:05:16,680 Speaker 1: as I said, we're bots that are highly you know, 117 00:05:16,760 --> 00:05:19,560 Speaker 1: that borrowed probably with just a five percent deposit, that 118 00:05:19,640 --> 00:05:22,200 Speaker 1: have only been making you know, their minimum repayments. So 119 00:05:22,240 --> 00:05:24,120 Speaker 1: then all of a sudden rates have gone up and 120 00:05:24,160 --> 00:05:27,039 Speaker 1: they happen to buy a car, or a secondhand car, 121 00:05:27,160 --> 00:05:30,360 Speaker 1: another car, or a boat. You know that they've got 122 00:05:30,360 --> 00:05:33,160 Speaker 1: this personal debt, are probably now thinking, well, I can't 123 00:05:33,240 --> 00:05:35,360 Speaker 1: keep up with the cost of inflation. I mean we're 124 00:05:35,360 --> 00:05:39,479 Speaker 1: looking at letters now at ten dollars. So unfortunately, it's 125 00:05:39,600 --> 00:05:43,560 Speaker 1: like a perfect terrible storm that everything around you has 126 00:05:43,640 --> 00:05:45,680 Speaker 1: gone up at the same time your mortgage has gone up. 127 00:05:46,560 --> 00:05:49,000 Speaker 1: And let's get real here, Renters have been fighting this 128 00:05:49,120 --> 00:05:52,159 Speaker 1: for some time as well. Renters have seen their rent 129 00:05:52,200 --> 00:05:55,000 Speaker 1: increase over the past one or two years, and they've 130 00:05:55,000 --> 00:05:56,359 Speaker 1: been trying to juggle this as well. 131 00:05:56,560 --> 00:05:59,760 Speaker 2: I think we forget that a third of Australian's rent, yes. 132 00:05:59,600 --> 00:06:03,120 Speaker 1: But Amanda, and also a third don't even have a 133 00:06:03,160 --> 00:06:06,479 Speaker 1: mortgage or a say this. So for these people, they're 134 00:06:06,520 --> 00:06:10,320 Speaker 1: probably thinking, well, hello, it's about time my online favor 135 00:06:10,400 --> 00:06:13,880 Speaker 1: or my turn deposits playing me something you know, you know, 136 00:06:13,960 --> 00:06:16,280 Speaker 1: your parents or something like that, or you know, seeing 137 00:06:16,360 --> 00:06:18,799 Speaker 1: as I'm looking for some of this relief as well. 138 00:06:19,000 --> 00:06:20,800 Speaker 2: But it makes sense from what you're saying is to 139 00:06:20,839 --> 00:06:22,880 Speaker 2: go through everything and try and find the cheapest deals 140 00:06:22,880 --> 00:06:25,599 Speaker 2: you can with all your existing bills and your credit 141 00:06:25,640 --> 00:06:28,480 Speaker 2: cards whatever, and funnel that in exactly. 142 00:06:28,560 --> 00:06:30,960 Speaker 1: And also don't hesitate to pick up the phone and 143 00:06:30,960 --> 00:06:33,640 Speaker 1: call you bank, because, like I said, their loan books 144 00:06:33,640 --> 00:06:35,640 Speaker 1: are going to shrink because people aren't going to be 145 00:06:35,720 --> 00:06:37,600 Speaker 1: running out getting home loans as much. So they're going 146 00:06:37,640 --> 00:06:39,760 Speaker 1: to start looking at their existing customers and trying to 147 00:06:39,800 --> 00:06:41,760 Speaker 1: protect them from moving. And there's going to be a 148 00:06:41,760 --> 00:06:44,400 Speaker 1: great reshuffle here because of the fact, like I said, 149 00:06:44,400 --> 00:06:46,120 Speaker 1: if you can still pick up breaks at one point 150 00:06:46,200 --> 00:06:48,640 Speaker 1: oh three and you're looking at a four, then what 151 00:06:48,680 --> 00:06:49,240 Speaker 1: are you waiting for? 152 00:06:49,880 --> 00:06:52,280 Speaker 3: Have you that you know you've given us great news, 153 00:06:52,320 --> 00:06:54,440 Speaker 3: But really, at the same time, my printer is out 154 00:06:54,440 --> 00:06:56,240 Speaker 3: of ink. I've got to go and get printer ink, 155 00:06:56,279 --> 00:06:57,880 Speaker 3: and then I've got to try and work out how 156 00:06:57,920 --> 00:06:59,640 Speaker 3: the printer works. 157 00:06:58,680 --> 00:07:03,520 Speaker 1: And homework for the weekend. Oh okay, because I told 158 00:07:03,520 --> 00:07:05,159 Speaker 1: you to print it out, we'll just look at it 159 00:07:05,160 --> 00:07:05,680 Speaker 1: as the screen. 160 00:07:05,760 --> 00:07:10,760 Speaker 3: No excuse this highlight the screen. Effie. Thank you so much. 161 00:07:11,120 --> 00:07:13,080 Speaker 3: Effie's like this book, by the way, Ditch the Debt 162 00:07:13,120 --> 00:07:16,000 Speaker 3: and Get Rich, is in all good bookstores, or you 163 00:07:16,000 --> 00:07:18,960 Speaker 3: can listen to her podcast, Real Money. Effie's a hos. 164 00:07:19,040 --> 00:07:21,320 Speaker 1: Thank you, thank you, Good morning everyone. 165 00:07:21,400 --> 00:07:22,120 Speaker 2: Thanks Effie.