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Speaker 1: This is jam Nation. We're jes.

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Speaker 2: Has more than two decades of experience helping ossies make

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Speaker 2: the most of their money. We thought we talked to

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Speaker 2: Effie to see what does it mean and how frightened

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Speaker 2: should we be?

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Speaker 1: Hello Effie, good morning, Amanda and Jonesy. Hello.

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Speaker 3: Should we just run out into the street and just panic?

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Speaker 3: Poo our pants too late?

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Speaker 1: You mentioned you might be selling your house under distress?

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Speaker 1: What time will that be? Joan Swoop?

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Speaker 3: I was watching the news. I was watching the news

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Speaker 3: last night and I just had and I said, oh

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Speaker 3: my god, look at this, Look at this. And then

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Speaker 3: my wife said, well, eleven years ago we were paying

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Speaker 3: close to nine percent interest rate. And I said, and

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Speaker 3: how did we go with that? And she said we did.

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Speaker 3: All right, We're okay, we absorbed it. You know, it's

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Speaker 3: it's not then the media seems to be casting a

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Speaker 3: darker picture than what it actually is.

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Speaker 2: Some people have bought their houses with this very low

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Speaker 2: interest rate, and that's that's as high as they can go.

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Speaker 2: So what do we make of it?

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Speaker 1: Effie? Yeah, look the valid points and what you're saying,

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Speaker 1: But we've got to remember too, we're seeing a whole

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Speaker 1: lot of homeowners who have never seen a rate hike. Yes,

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Speaker 1: they're rock bottom rates, and the rates had to go up.

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Speaker 1: I mean, cheap money, virtually at no cost, and then

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Speaker 1: you've got inflationary pressure way over that five percent. It

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Speaker 1: was never going to last. The concern is, if you've

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Speaker 1: got a home loan, the bank would have put a

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Speaker 1: three percent buffer on there anyway, so you should be

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Speaker 1: able to absorb this rate hike of point two five percent.

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Speaker 1: But here's the catch. We probably got our home loan

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Speaker 1: and then we went out and brought a car because

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Speaker 1: we all suddenly wanted to have a car. We probably

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Speaker 1: bought a boat. So the car's tying the boat. We've

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Speaker 1: probably got some buy now, pay later and inflationary pressures,

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Speaker 1: and you can see why we are in this really

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Speaker 1: tight spot. And so a five hundred thousand dollars mortgage today,

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Speaker 1: you'll see a rate rise of about you'll see a

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Speaker 1: payment of about sixty eight dollars more than you need. Now,

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Speaker 1: that may not sound much, but you've got to remember

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Speaker 1: they're expecting this to go up the cash rate by

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Speaker 1: two percent mid next year. Let me show you something frightening. Now,

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Speaker 1: if you bought a house in Sidney, your repayments will

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Speaker 1: go up by additional one thousand dollars per month if

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Speaker 1: it does hit that two percent increase, So you can

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Speaker 1: see how expensive this can be. Now, all banks, all

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Speaker 1: major banks, but NOD came out last night and increased

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Speaker 1: their rates by point two five. So you'll probably finding

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Speaker 1: your inbox a little letter letting you know about that.

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Speaker 1: The rate hikes won't kick off until about thirty, twenty

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Speaker 1: or seventeenth of May, depending on who you went.

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Speaker 2: So if families are in those circumstances and hearing these

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Speaker 2: figures are pretty scary, what's to be done? Is this

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Speaker 2: happening because the cost of living and inflation's going up.

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Speaker 2: Will we see a balance in other part of our

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Speaker 2: lives that makes this less scary and that.

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Speaker 1: Actually you've hit the nail on the head. So basically

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Speaker 1: what you're saying is that will this lower inflationary pressure,

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Speaker 1: will my interest rate rising, will me paying more on

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Speaker 1: my mortgage, lower the price of goods and services? Will

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Speaker 1: make it more painful for me, and it's going to

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Speaker 1: hit people the most. You know, the people that are

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Speaker 1: going to be hurting the most of those that have

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Speaker 1: got a big mortgage. It won't reduce prices automatically because

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Speaker 1: we've got to remember a lot of these price hypes

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Speaker 1: are because the war in Ukraine, the labor shortages, the

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Speaker 1: supply chain issues, so it's going to take a while

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Speaker 1: for that to actually happen. And just on the flip

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Speaker 1: side of this, if I can just let you know,

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Speaker 1: for people out there that are retired or on the

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Speaker 1: pension or maybe a fixed income, it's nice to see

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Speaker 1: some rates creeping, especially in term deposit rates. So I

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Speaker 1: mean I almost crell off my chair when I saw

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Speaker 1: a six month ten deposit at one point eight five percent.

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Speaker 1: It's not earth shattering. It's better than money under the bank,

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Speaker 1: money under your bed, as it has been for the

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Speaker 1: last couple of years.

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Speaker 2: So there are swings in roundabouts.

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Speaker 3: Swings and roundabouts with all those things, aren't there.

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Speaker 1: Yeah, there is. Look, don't expect to see banks to

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Speaker 1: increase all saving rates fast because remember those of us

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Speaker 1: who did well out of the pandemic have saved quite

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Speaker 1: a bit of money in our bank accounts and they're

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Speaker 1: basically full of cash in that regard to the banks.

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Speaker 1: Don't really want to hike up saving accounts. We are

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Speaker 1: going to cost them money, and it's going to ease

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Speaker 1: their profit margin. So I think the focus for the

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Speaker 1: next couple of days is who's increasing rates and by

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Speaker 1: how much, because remember they're not all going to increase

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Speaker 1: the same amount. And this is the homeowners. The tip

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Speaker 1: here is check out what you're going to be paying.

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Speaker 1: Maybe check at the end of this week or maybe

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Speaker 1: next week, because things will still keep moving slowly and

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Speaker 1: then you are always better being a new customer. Loyalty

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Speaker 1: does not pay there, it is, Effie.

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Speaker 3: This is great. Amanda doesn't have to go and dig

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Speaker 3: out the old jar out of the backyard and get

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Speaker 3: all the money that she buried there twenty years ago

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Speaker 3: as well.

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Speaker 2: I might do it anyway.

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Speaker 3: This has been great Real Money with Fi Zahas. The

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Speaker 3: podcast downloaded today on your favorite podcast. Effie, thank you

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Speaker 3: for joining us.

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Speaker 1: Thank you very much for having me. Guys,