Now just taking on a second mortgage, Warwick’s Stevie Brennan will feel the pinch if interest rates continue to rise.
Now just taking on a second mortgage, Warwick’s Stevie Brennan will feel the pinch if interest rates continue to rise. Jenna Cairney

Residents feel the pinch

IT has been a year of bill increases and Rose City residents are now bracing themselves for when they feel the full impact of this week's interest rate rise.

Almost as soon as land and business owners squared up their general rates with local council, the Reserve Bank of Australia (RBA) slugged them with a pre-Christmas interest rate rise.

Media reports yesterday suggested basic living costs were crippling Queenslanders, who barely take home enough money in a week to pay doctor bills, let alone afford personal luxuries.

In the fall out of the RBA's decision to add 25 basis points to the cash rate, the Commonwealth Bank promptly opted to lift its interest rates by 45 basis points – almost double.

Politicians have been quick to vent their anger at the “greedy” banks with Prime Minister Julia Gillard urging consumers to shop around.

With financial stress setting in, some are calling on the government to control interest rates, as Westpac unveiled a record 84 per cent profit increase and refused to comment on whether it would follow its rival.

Australian Bureau of Statistics figures show a slump in building approvals, which makes the property situation look even bleaker.

It could be crunch time for those outside of the big four banks to make a name for themselves and lure customers with lower interest rates.

A Warwick Credit Union spokesperson said the local bank would make a decision and announcement today regarding its plans.

This year Southern Downs general rates rose by an average of 9.8 per cent, as well as significant rises in electricity and water bills.

Crunching the number

  • According to realestate.com.au the most recent median (average) house price in Warwick is $240,000.
  • At Commonwealth Bank's new standard variable rate, 7.81%, weekly repayments on this are $420.18 per week.
  • The Australian Bureau of Statistics average wage for Warwick (2007) was $32,724 ($629 per week).
  • This leaves the average homeowner $208.80 a week for other expenses.

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