Australian families tighten budgets as RBA raises rates for fifth time

The Reserve Bank of Australia lifted its cash rate from 4.6% to 4.85% on Tuesday, the highest level since 2008, prompting many mortgage-holding families to seek extra work and trim household budgets. Sydney residents Avelina Satiu and her husband Chris, who each hold two jobs, said the rise means longer hours and less family time. > "We have to review our budget; we usually look at how many extra shifts we can pick up," Satiu said, adding that an additional $100-$200 a month is often needed to cover the increase. The couple, who owe about $850,000 on their four-bedroom home in Gregory Hills, now pay roughly $1,350 a week in mortgage repayments.

Satiu, a finance employee who also does freelance social-media work, and her husband, who works full-time in insurance and on weekends in disability support, each work between 50 and 60 hours weekly. Their youngest child was born five months ago, and the family relies on an aunt living with them for childcare.

In Nowra, university staff member Tiffany Betts, who bought a home with her mother in 2021, described a tightened lifestyle after the rate hike. She said the mortgage costs about $1,200 per fortnight and that she has had to cut non-essential spending. > "I work hard, I earn good money, and I still can’t get ahead in life. I live paycheque to paycheque because there’s just not the money left over to put into savings," Betts said.

RBA Governor Michele Bullock acknowledged the pain caused by higher borrowing costs, noting that the move is intended to curb inflation. > "This is not the news that many Australians want to hear, but it is what’s needed to get inflation down. Some pain now will prevent even worse pain down the track," Bullock said.

Both families highlighted the broader impact of rising rates on households with limited disposable income and called for alternative measures to share economic burdens more equitably.