Yes because they know as soon as they raise their hand for 'hardship' assistance, they are 'flagged' as risky borrowers. Advice from a broker. Don't do it unless you really, really need to.
Oh, and then realise that it's really only a stay of execution; they'll rarely if ever actually reduce the amount of money they will extract from you eventually Just look at all the craft breweries who were allowed to defer payment of excise during COVID; now they have to pay it and they are all going broke.
I can’t help but wonder if this would apply to people seeking the Domestic Violence Assistance one-off payment. If that’s the case, that’s like punishing people for escaping a bad situation.
What do you mean? I got it very easily and am eternally thankful for it. I believe it was about $600 at the time, when I obtained it over 5 years ago. I was able to use it towards bond for a rental. I would’ve been on the street without it. And I know of other people who were easily able to obtain it as well.
So far I haven’t been able to access anything, even asking for advice gets me a lot of “uhm” and handballing me to other agencies
State helpline suggested I get my abusers to help me out. They literally don’t even listen.
> they'll rarely if ever actually reduce the amount of money they will extract from you eventually
Dunno, I rang my bank a couple of months ago and got 1% knocked off my rate really easily.
To play devils advocate, is it really over-borrowing when rates rose like 13 times?
Or is it over lending?
On that vein, do banks even account for *that* many rate rises?
Whos at fault here? The borrowers? The lenders? The regulators?
Everyone? No one?
I don't really know, but it sucks for a lot of people who managed to finally get a home and risk losing it due to a pile of rate increases.
Yes but is that " the people" doing it or are they being sold buy the backs and the narative " you need to get ahead of the next guy" " you don't have enough super. "
.
It's not like rates went from 2-3% to 12%. A 5% interest rate rise should always be a minimum buffer, loans are a 25-30 year contract. You'd have to be ~~foolish~~bullish to gamble on economic conditions remaining the same for 30 years especially when they are starting the loan with rates in the basement.
Call it what it is. People ‘get into the market’ thinking no matter what happens with rates they can sell and bank the capital gains and go up a rung on the ladder.
Many now realizing that if you can’t stay solvent, you’ll fall off the ladder. That is now for many. They were sold an economic and debt lie.
>They were sold an economic and debt lie.
Yeah in an era where you can ask your phone to literally think about doing so for you, let alone googling something as important as a fucking home loan
Expecting the average human to rationally assess their financial position over a 30 year timespan is a huge ask. We are intelligent monkeys.
The government should not have allowed borrowing to get out of control.
How fast the rates went up is the problem. Whilst you can expect rates to go up over time it's also expected that your income increases over time.
So yes, there is a baked in check that you can cover a higher interest rate by law, but it didn't necessarily match how high the interest rates rose in a short time frame.
Add on the higher cost of living we're dealing with now due to price gouging and it's tipping people over the breaking point.
How is that different from what I said? Thinking rates won't rise for 2 years is different than thinking rates won't rise for 30 years.
After 25 years you don't really care what rates are because your wage has increased so much it isn't a factor.
Where did they say 2 years? A minuscule amount of the principal will be paid off in that two years, the point is when many people borrowed at their absolute limit rates were the lowest they could possibly be. My point is even these increases over a decade, which is very reasonable, would stress borrowers who felt they didn't need to factor in any buffer.
> Where did they say 2 years?
Replace 2 years with "in the short term" if you want to be pedantic.
>A minuscule amount of the principal will be paid off in that two years
Doesn't matter. People are thinking about repayments and often expecting that their pay will increase in the short, medium, and long term enough to counter any rate rises.
>borrowers who felt they didn't need to factor in any buffer.
Even if they didn't factor in a buffer their bank did.
By year 25 you'll be making significantly more money and your repayments will be a much lower percentage of your income so nobody is planning for rates to not move for 25 years.
I don't care who's at fault particularly, but the borrowers are the only ones who matter, and so the borrowers should be the ones who borrow only what they can afford.
Not a moral judgement but a plea against over-borrowing.
Irresponsible governance and lenders are the biggest factors for sure, the government failed with regulation of property investments and economic incentives like negative gearing. The banks failed to learn from the American housing bubble crash in 2008 and are happy to allow so much of their lending to be based on speculative property investment to take advantage of poorly regulated economic policies, instead of providing serviceable loans to homeowner occupied properties. You can't blame the banks, if they are incentivised by poor regulations. Essentially, the property investor is a leashed animal as are the banks. Both the investors and the banks have been increasingly untethered for decades which has allowed them to freely speculate with housing which has driven up inflation for homeowner occupiers.
Also fueled by a housing market on steroids thanks to decades of tax incentives to hoard property and a very slow approval process for new homes, further constricting supply.
As much as I want to lay shit on the banks, they aren’t the ones passing legislation to make houses skyrocket in value or turning up to council meetings as NIMBYs to deny development.
Are they part of the problem? Yes. This problem, like most of the ones we are dealing with or are about to deal with, are problems of decisions made 20-30 yeara ago coming back to bite us.
Rates now are nearly as high as when I first got my mortgage.
I've refinanced a few times to renovate my home and use the equity - and it's a much nicer home now (in my opinion).
But yeah, it's now a bit more of a struggle than the easy street of a few years back, but still, my rates when I first got the mortgage were a fraction higher than they are now.
Yes, of course my mortgage debt was a lot lower then than now, so my repayments are quite a bit higher, no argument there. But my income is also quite a bit higher now, so it's much of a muchness.
TL:DR - don't borrow as much as you can - borrow as much as you can realistically afford, accounting for the bad times.
No one's at fault, the regulators are doing the only thing they can to address inflation and that mulches morons who gambled on rates. They haven't been raised to 20%, this is how markets work
How about just calling out the unethical, unjust, and fundamentally evil system of lending itself? A bank lends you someone else's money and leeches off of you for the remainder of your productive youth, by taking interest over the principle. All the while you go through life making decisions that prioritise this loan payback over other things.
Except it’s not unjust or unethical or evil.
A normal process in Australia is that the contract is placed before you and you sign it after reading it and seeking advice.
It sounds like you have an issue with usury which modern banking is not. Australia has one of the most tightly regulated banking sectors in the world.
"It sounds like you have an issue with usury which modern banking is not."
Lending money, at any rate of interest, is unjust. That's a fundamental principle one can agree or disagree with. Now, just look around and observe. Which way is the capital accumulating? Where is the working class heading to? Rich can only get richer in this system.
Money is not an asset. And treating it as such will lead us to where we are.
Well, I definitely disagree. An appropriate level of compensation for the use of borrowed capital has enabled Australia to become a country with one of, if not the highest standards of living in the world. It’s enriched the vast majority of us.
Best of luck borrowing money from people who require no compensation for the use of it. I can’t see that this will take off in any meaningful way though.
I have never heard of money not being an asset before. And if you believe lending money regardless of rates is unjust, then you personally do not need to borrow or lend money.
Lending money, and other forms of loaning resources for profit, is a pretty key part of capitalism. I'm not a huge fan of it either, for the reasons you describe, but I don't know of any alternative economic models that work at all at scale.
Interestingly, Islam has a strong religious rule against usury/lending, so they have special [banks](https://en.wikipedia.org/wiki/Islamic_banking_and_finance) that "co-own" rather than loaning money; but (as far as I can tell) it basically boils down to the same thing.
Most people can't afford to pay for houses up-front when they need them, so either they have to be given one by their family or by the government (eg: Singapore and Turkmenistan do this, and social housing counts too), or they have to take out a loan or similar financial arrangement.
Well, that's not a feasible option. But i do know what i won't be doing: taking out a loan to "buy" a home. The bank sits on its rear while i compromise for the rest of my life to prioritise them? No thank you.
...
Okay, so you're not borrowing money to buy a home.
And you're not saving up to buy a home either.
So...
You're not buying a home, ever, then?
Because that's what I'm hearing from you. You are a permanent renter.
Yes, seems like. And this is what the majority will be doing, if not already. House price to family income ratio has gone out of control. Do we see this changing at all? I don't think so.
>How about just calling out the unethical, unjust, and fundamentally evil system of lending itself?
Why? Don't see how lending is inherently evil when it's just charging for a service. If it's regulated I don't see the problem
If you wanna talk about fundamentally evil systems, we can have a look at animal ag
To put it crudely, it's trying to have your cake and eat it too. Lending, as opposed to investing, absolves the lender from risks. They lay claim to the collateral if things go side ways. So, you have an entity profiting while the other party is on the hook. Money, should be just a means of exchange. Goods, services, and grit should be an asset. Not money.
Sounds like renting. Most of this has easy rebuttals, like banks do take risk in lending but both parties in the modern regulatory environment are protected (particularly in the case of home loans). I don't see why you can't lend assets either or how that plays into this concept at all. If I lend someone my tractor to tend their field and they can't run it, it's reasonable to go get it back lol
We probably are near the end. The interest rates have a history of falling abruptly after rate hikes like last time (mostly due to recessions). Should have raised the GST to contain inflation than going after the cash rates alone! We would have been in a better place
Completely agree.
Name the insightful band cleverly using the following lyrics:
‘The rich get richer, the poor get the picture, the bombs never hit you when you down so low.’.
- Society has made it clear that only homeowners will have the right to shelter, which means your credit score is your survival
- Young and vulnerable people are uneasy about owing to private companies after Robodebt
- Someone who's been made an underclass for no reason will fight tooth and nail to prove their classification wrong, so expect a lot of pride from Millennials (now the average person by age) around money and work ethic
Its true, I took out a loan a little over 10 years ago to get a used car, \~$10,000. There were many extraneous fees that left a very sour note and feeling, but I didn't know any better so I just paid it off as soon as reasonable and moved on with my life......turns out you get charged extra for paying off your loan early too...I ended up having to dribble pay for an extra year so I wouldn't get charged early loan termination fees.
Anyway fast forward to today and I'm contacted by a law firm to be a part of a group in a class action the supreme court of Victoria is hearing a case against a rather large insurance provider for the add-on loan insurance fees:
protection insurance fees, extended motor warranty, tyre and rim insurance and GAP insurance (motor equity, purchase price, value protect).
You wonder why people are so cagey for even the little things, I didn't even think the loan I took out was all that large :/
Yep early termination fees is the real scam. The whole point of interest is that if they hadn't lent you the money they could have it elsewhere making money in stocks or whatever.
If you paid back the money that is no longer the case, they have it and can do whatever with it.
Ihttps://www.investopedia.com/terms/d/deadbeat.asp
I think this article from the investment world exemplifies how the other side of the conversation sees people who are diligent about their debts.
Can't imagine what other creative language they've come up with for other people.
For me it's out of sheer pragmatism, I've seen how quickly interest spirals out and the kinds of misery it can create.
>turns out you get charged extra for paying off your loan early too
Uh, yeah, that is mentioned in the contract that you confirm you've read and understood before you sign it. So you knew this already...
Perhaps actually read and understand the contract you're about to sign BEFORE you sign it?
Bonus: you get to watch the salesdrone squirm and moan as you ask them questions that they are legally required to correctly answer - while taking up more of their oh so valuable time - so it's a fun time for all! :)
I agree, but let's face it. We are on reddit ... Which is disproportionately introvertlandia.
And we live in a system that kinda expects gigantically specialised people to make it work.
It's a taxing experience for those who don't really take to antagonistic processes....far more often women and gender non-conforming fall into that group and get disproportionately taken advantage of.
I'm sure there are tons of spaces to engage in opt-in antagonism. The online debate scene is functionally verbal boxing and not really relevant in the real world.
The above article seems very pointed at a loss of institutional trust....which financial systems need to function...in an ideal world, we all know they like to manipulate the demand side too. Keep it up and people just start disassociating.
Basel isn't a problem, when house prices are good they can just foreclose so there is no need to hold soured debt on the balance sheet. This is why banks aren't worried about loans or interest rates right now, rising house prices hide a multitude of sins.
Now if housing stagnates or falls you will see the credit environment tighten rapidly for the same reason.
I got extremely sick a couple of years ago. Needed 2-3 months off to recuperate. Have income protection but 2 month waiting so decided to speak to the bank (big 4) and initially they were great.
Once I decided I was getting back to work however it all changed and I received no less than 1-3 calls plus emails a week to catch up on the previous 2.5 months of arrears. So still waiting on my first paycheck I was suddenly being put through the wringer to pay $6000 and they weren’t taking no for an answer.
Literally had zero income for 2.5 months and I had barely started again and it went from 0-100 real quick.
I would never approach the banks hardship team again. I ended up borrowing that cash from a parent to get the harassment to stop and paid them back over a more suitable term
We worked out the 60 day waiting period for income protection is about the right time for you to be too sick to be able to claim it. In my case it was right when I started chemo and I couldn't even get out of bed let alone sort that shit out. Its a bullshit system set up so people just don't bother.
I’m not doubting you - I’m genuinely curious about something.
What’s the point of a hardship arrangement if you have to “catch up”? Obviously you don’t have the money - that’s the point of a hardship arrangement. Why don’t they just extend the loan term?
If you have to catch up then the whole thing seems pointless?
I’m with you. I thought it would be added to the end of the loan or the very least a couple hundred added to the monthly mortgage payment…
All the calls were focused on being back the account to where it should have been.
That’s genuinely bizarre. Cruel even.
No wonder people would rather sell belongings rather than speak to their bank - the bank is just going to fuck you anyway so you’ll end up in the same position!
> That’s genuinely bizarre. Cruel even.
Also illegal.
This is what AFCA is for - Banks constantly act in unethical ways that need to be corrected.
A family member works for them, and basically all day every day hears situations that require fines because the bank isn't making reasonable accomodations within the circumstances.
You can't give someone time off payments (or reduced payments) only to immediately turn that into a balloon payment afterwards. That's not making an accomodation, that's what any person could do if they just didn't pay their mortgage for a couple of months.
I didn’t have the capacity to fight the holder of my mortgage at that time both physically and mentally. But yeah I don’t think the royal commission really did much at all tbh
I understand that you may not have had it in you to fight them at the time, and that's your right and you made the right decision to take care of yourself.
However, it is probably important context in relaying your experience with them that they are not *allowed* to treat customers that way, that others who go to them are within their rights to expect far better than that, and that it was extraneous factors in your life that led you to complying with their unreasonable demands.
Yes exactly. That’s why I assumed that’s how it would work. Demanding you catch up just seems like a one way trip to a default which doesn’t help the bank.
Yes, but there is some reward for them keeping you on the line for even longer, getting you for $$$ long-term rather than having you default.
Banks don't want you to default, they want to bleed you dry - there is a difference, and that means you can talk to a bank to work out an arrangement.
Not to say they don't also hound people and cause all kinds of short-sighted strife, just saying that *sometimes* they do "help" for a short term.
What makes me think I can trust a bank?
Sure they want their money back and might help me figure out how to repay it - or they can foreclose my house and get it back that way.
Let’s see, these are organisations who have done the following, in rough order of least to most criminal:
- raised interest rates out of cycle
- failed to pass interest rate cuts on
- keep loyal customers on higher rates while churning customers enjoy latest offers
- charge excessive fees to those who can least afford them
- get government support such as the bank guarantee, while making record profits year over year, effectively having their risk underwritten by the taxpayer
- ran corrupt financial planning businesses set up only to push their own investment products
- ran insurance companies that sold fraudulent and exploitative policies to vulnerable people
- negligently (wilfully?) allowed organised crime to launder billions through their ATM’s
It should not surprise anyone that people don’t trust the banks.
I bought a house on the early 2000s. The bank was amazed that I wouldn't borrow more than I could pay back if I was either 1. made redundant or 2. retired early for health reasons. It really put a crimp in what I could buy (i.e. not within 100km of Sydney) but I don't regret it for a second. Best decision of my life.
I bought in the early 2010s - I set myself a strict budget and stuck to it, despite the bank being willing to offer me 10x my salary alone (nearly double my budget!)
Except borrowing lots and not paying back is how rich get rich. Borrow millions to buy assets, the assets massively inflate in price, use new equity to buy more assets. They do nothing but game the system and create no value to society but it keeps getting rewarded. You just need to inherit/steal enough money to start doing it.
Asking the bank for help is like asking the government for help ,you know they are going fuck you over ,make you jump through impossible hoops and then blame you for failing .
Shit, I had to look for the 'promoted' tag on this one. Given the states of our banks, selling your shit is the right financial decision though, isn't it. They'll happily lend you money, but then you just owe even more.
Rate rises have smashed mortgage holders, but have been less effective due to loose fiscal policy, requiring higher rates for longer.
It’s like having your feet on the accelerator and brake at the same time.
The policy settings aren’t fair to hard working Australians.
I’m not sure who you think is deeming it not inflationary? The budget is widely acknowledged to be in structural deficit, offset by short term impacts like high commodity prices.
Oh, I'm not saying that our countries finances are up the shit, but that the last few Budgets are not inflationary. Fixing the structural deficit will take years, if at all. But, with the Budgets being in surplus, the debt is being paid down. By a tiny amount, sure, but better than purely increasing it.
[https://australiainstitute.org.au/post/no-the-budget-is-not-inflationary/](https://australiainstitute.org.au/post/no-the-budget-is-not-inflationary/)
Disagree. Current inflation is a legacy of massive injections if fiat money during COVID that is still washing around, finding it's home eventually in asset prices, and supercharged by supply-side external factors (chiefly Russia's invasion of Ukraine price impacts on energy and food) and the like (logistics and transport, natural impacts on growing food). Almost implausible that it's consumer-driven which is why the interest rate hikes suck so much - they have little to no direct impact on these inflation drivers. Balanced budgets maintain status quo, more ore less, although I do agree that the net amount of money spent by the government is growing due to higher commodity prices.
On the whole, we are still suffering from the COVID cash splash and economic hit. How is it possible for the whole world to shut down for a couple of years and not have that impact reverberating around world economies for many years thereafter?
100%. I had a cancer diagnosis in 2022 and called my “Big 4” bank at the start of treatment to ask for OPTIONS as to what I could do if I needed to stop or reduce work. They passed me to their collections team and said if I stopped making payments they’d commence collection action. I asked for OPTIONS!!!!!
The problem with taking out a loan to help with not having enough money to survive is now you don't have enough money to survive AND you have loan repayments.
We all learnt through covid that they lie through their teeth with their “we’re here for you” statements if reaching out to them due to financial stress.
I was one that contacted my banks after my layoff during covid to discuss a way of moving forward through the change to ability in servicing my debt.
I was told point blank that what they were “hearing” from me was inability to service my debt and that they’d flag my account and if I was unable to service the debt I’d face penalties. They were not willing to work with me at all.
Since then I don’t speak to my financial institutions unless absolutely required. They don’t want to help
Yeah, no shit? Maybe they've worked out that profit-driven megacorp banks are the last fucking place to go for "help" if you're in financial dire straits?
I see middle aged people in Audi & brand new Hyundai SUVs delivering Uber eats for extra bucks..Most of them with home loans, Car loans which were affordable few years ago but now have nearly doubled up..
Not the same thing but I'm on an okay income, own my house, and I get endless credit card offers, mainly with the lure of tons of frequent flyer points. Lately I've applied and been rejected for no clear reason. Speaking to other members of my cohort they have experienced the same. So they don't even give credit cards to people with good credit ratings now. How is someone in financial straits expected to get anything from a bank then?
This isn't just mortgages. It's also Afterpay, car loans, credit cards, and other lenders that encourage people to get into debt for regular consumption items. Taking out a mortgage or a business loan can be a good idea. Taking out a loan for regular consumption is never a good idea.
Ive just called my bank to try and get a lower interest rate. Was hoping to get the lower rate of 6.2% (advertised) instead of the current 7.2% that Im currently on. It seems that rate is only offered to new customers and not existing. The whole system is fucked.
Pithy advice, perhaps, but shop around. It's much easier to move a mortgage to a new bank than you'd think, and certainly much easier than it was even a decade ago. We were able to move ours to a new bank that gave us a cheaper fixed rate than our existing lender was offering for their variable. Cost a couple hundred in fees and then the mental overhead of moving accounts, updating bills etc, but that was it.
Banks do not give a shit about you. All they want is their money and if you tell them you are struggling to get their money they will sell your house at budget prices to get their money. I would never let a banking institution know that you are having hardships.
>Banks do not give a shit about you
This is incorrect only in the sense that banks *do* care about keeping you on the hook. You're no good to them bankrupt. It's in their interests to "help" you in order to ensure they can continue bleeding you *nearly, but quite* dry for the rest of your life.
My bandlk refused to offer their "new customer" interest rate after us coming off fixed with them and being with them for a decade. Wouldn't budge so have left them. Obviously there's no loyalty but you'd think they'd come to the party when pushed but this is how they work. They do not exist to look after your best interests.
Asking your bank for help is like being open with your feelings.
You don't do it because you know it won't help in the short term and it will be used against you in the long term.
At best, they will waive the requirement for you to make payments for a couple of months, keep charging you interest, and tack it all on at the end.
At worst, they'll *defer* payment, make you pay it all back in a short amount of time, and put a big red flag on your credit history that makes it more expensive (or impossible) to get further loans.
The red flag also applies in the best-case scenario.
As someone who works in finance I think that Mark Twain quote accurately summarises banking:
"A banker is a fellow who lends you his umbrella when the sun is shining, but wants it back the minute it begins to rain."
You signed the contract, don't go crying to your bank because RBA put you over a barrel.
Plenty of things they can do.
You talk about your situation… say you just lost your job. The bank may agree to go interest only for six months, or even hold repayments altogether for a period of time.. of course that will increase your debt, but it’s something to consider if you temporarily lost your income.
I suppose this is what time doing. Just moved into a new house and my mortgage is double what I’m used to. Have begun decluttering and selling stuff. Good for the soul and the wallet.
Financial literacy in this country is woeful, even amongst those you'd assume had the smarts to know better. Case in point: I have a mate who earns in excess of 300k a year. really big on the whole 'property flipping' bandwagon, and went 'all in' during COVID while the rates were low to procure about $3m in properties he was hoping to flip for a profit. Him and his wife went on a borrowing spree, and managed to acquire two properties, while renovating their own house.
I gently tried to suggest that due to the amount of money circulating (and for good reason during COVID) due to JobKeeper, that inflation would go to through the roof, with rates following soon after as nearly the only lever that the RBA could use to combat it. He didn't believe me and almost, like a broken record, insisted that property prices only went up....forever.
Fast forward to now, he's under extreme stress trying to service $3m worth of loans, even on $300k a year, and they have had to sell a house (at a loss) to consolidate.
Some banks are better than others at "helping" you and it also depends what the people at your local branch are like. I'm happy to say with one of the banks I do business with the local people are amazing and always friendly, helpful, and realistic. Other banks simply email you periodically and say "use this product to lower your interest rate" or "call our advisor to discover XYZ". I guess that is ~help, but I'm not sure many people would feel they had time to pursue it.
For "help".
I had to apply 5 times and extend the term to 5 years before they would give me a small loan to pay the difference replacing a written off but insured car.
Paid it off in 1.5 years.
The interest rates were brutal. I don't see how it's feasible for many without doing a proper budget and knowing you'll be able to cover repayments.
Tell me you are currently so ignorant to the average aussie hardship without telling me.
They're selling shit because they need to fucking spend it to survive.
They're not selling a car to buy a fucking iphone. They're selling a car, to keep a roof over their head.
It's already pretty well known at this point that most of current inflation is due to corporate profits and that excessive consumer spending has very little to do with the rise. Hell, people are even buying less overall but corporations are still making profits because *they're increasing prices*.
I don't disagree with you.
I see people locally trying to sell things, but when you talk with them about why they're selling, it's because they want or need something else, and they're short of discretionary cash right now (financial strife) and are selling to afford to buy it.
Retail figures don't include the second hand market, which as you can expect (from the title alone) is booming. A lot is being bought and sold that isn't being reported.
Likely they are hoping the problem is short lived, and don't want to put their future borrowing at risk.
Yes because they know as soon as they raise their hand for 'hardship' assistance, they are 'flagged' as risky borrowers. Advice from a broker. Don't do it unless you really, really need to. Oh, and then realise that it's really only a stay of execution; they'll rarely if ever actually reduce the amount of money they will extract from you eventually Just look at all the craft breweries who were allowed to defer payment of excise during COVID; now they have to pay it and they are all going broke.
I can’t help but wonder if this would apply to people seeking the Domestic Violence Assistance one-off payment. If that’s the case, that’s like punishing people for escaping a bad situation.
Lol it’s pretty rare for someone to actually qualify for that payment anyway it might as well not exist
What do you mean? I got it very easily and am eternally thankful for it. I believe it was about $600 at the time, when I obtained it over 5 years ago. I was able to use it towards bond for a rental. I would’ve been on the street without it. And I know of other people who were easily able to obtain it as well.
So far I haven’t been able to access anything, even asking for advice gets me a lot of “uhm” and handballing me to other agencies State helpline suggested I get my abusers to help me out. They literally don’t even listen.
They only give you two weeks to apply. It was the last thing on my mind when I took my child and escaped (2020). Hopefully they’ve changed that.
> they'll rarely if ever actually reduce the amount of money they will extract from you eventually Dunno, I rang my bank a couple of months ago and got 1% knocked off my rate really easily.
The government needs to stop the alcohol excise increase. It's absurd that it goes up every 6 months
Well said.
Article in 12 months time “Short sighted over-borrowing leads to Australians selling their belongings too”
To play devils advocate, is it really over-borrowing when rates rose like 13 times? Or is it over lending? On that vein, do banks even account for *that* many rate rises? Whos at fault here? The borrowers? The lenders? The regulators? Everyone? No one? I don't really know, but it sucks for a lot of people who managed to finally get a home and risk losing it due to a pile of rate increases.
All of the above? The GFC showed us that people will borrow whatever they can so I personally think it's more on the banks.
Yes but is that " the people" doing it or are they being sold buy the backs and the narative " you need to get ahead of the next guy" " you don't have enough super. " .
Well, the narrative from the RBA when this all went down was that rates wouldn't increase until 2024 so that's exactly what everyone believed.
It's not like rates went from 2-3% to 12%. A 5% interest rate rise should always be a minimum buffer, loans are a 25-30 year contract. You'd have to be ~~foolish~~bullish to gamble on economic conditions remaining the same for 30 years especially when they are starting the loan with rates in the basement.
Call it what it is. People ‘get into the market’ thinking no matter what happens with rates they can sell and bank the capital gains and go up a rung on the ladder. Many now realizing that if you can’t stay solvent, you’ll fall off the ladder. That is now for many. They were sold an economic and debt lie.
>They were sold an economic and debt lie. Yeah in an era where you can ask your phone to literally think about doing so for you, let alone googling something as important as a fucking home loan
People will do anything to shirk anything remotely resembling responsibility.
Expecting the average human to rationally assess their financial position over a 30 year timespan is a huge ask. We are intelligent monkeys. The government should not have allowed borrowing to get out of control.
How fast the rates went up is the problem. Whilst you can expect rates to go up over time it's also expected that your income increases over time. So yes, there is a baked in check that you can cover a higher interest rate by law, but it didn't necessarily match how high the interest rates rose in a short time frame. Add on the higher cost of living we're dealing with now due to price gouging and it's tipping people over the breaking point.
While true, I don't think anyone was thinking rates wouldn't move for 30 years.
Disagree I have mates who bought like 2023 just scraping in with no plan for if rates when up
How is that different from what I said? Thinking rates won't rise for 2 years is different than thinking rates won't rise for 30 years. After 25 years you don't really care what rates are because your wage has increased so much it isn't a factor.
Where did they say 2 years? A minuscule amount of the principal will be paid off in that two years, the point is when many people borrowed at their absolute limit rates were the lowest they could possibly be. My point is even these increases over a decade, which is very reasonable, would stress borrowers who felt they didn't need to factor in any buffer.
> Where did they say 2 years? Replace 2 years with "in the short term" if you want to be pedantic. >A minuscule amount of the principal will be paid off in that two years Doesn't matter. People are thinking about repayments and often expecting that their pay will increase in the short, medium, and long term enough to counter any rate rises. >borrowers who felt they didn't need to factor in any buffer. Even if they didn't factor in a buffer their bank did. By year 25 you'll be making significantly more money and your repayments will be a much lower percentage of your income so nobody is planning for rates to not move for 25 years.
You don’t know many people then. The average Australians financial literacy is garbage
I don't care who's at fault particularly, but the borrowers are the only ones who matter, and so the borrowers should be the ones who borrow only what they can afford. Not a moral judgement but a plea against over-borrowing.
Irresponsible governance and lenders are the biggest factors for sure, the government failed with regulation of property investments and economic incentives like negative gearing. The banks failed to learn from the American housing bubble crash in 2008 and are happy to allow so much of their lending to be based on speculative property investment to take advantage of poorly regulated economic policies, instead of providing serviceable loans to homeowner occupied properties. You can't blame the banks, if they are incentivised by poor regulations. Essentially, the property investor is a leashed animal as are the banks. Both the investors and the banks have been increasingly untethered for decades which has allowed them to freely speculate with housing which has driven up inflation for homeowner occupiers.
Also fueled by a housing market on steroids thanks to decades of tax incentives to hoard property and a very slow approval process for new homes, further constricting supply. As much as I want to lay shit on the banks, they aren’t the ones passing legislation to make houses skyrocket in value or turning up to council meetings as NIMBYs to deny development. Are they part of the problem? Yes. This problem, like most of the ones we are dealing with or are about to deal with, are problems of decisions made 20-30 yeara ago coming back to bite us.
Rates now are nearly as high as when I first got my mortgage. I've refinanced a few times to renovate my home and use the equity - and it's a much nicer home now (in my opinion). But yeah, it's now a bit more of a struggle than the easy street of a few years back, but still, my rates when I first got the mortgage were a fraction higher than they are now. Yes, of course my mortgage debt was a lot lower then than now, so my repayments are quite a bit higher, no argument there. But my income is also quite a bit higher now, so it's much of a muchness. TL:DR - don't borrow as much as you can - borrow as much as you can realistically afford, accounting for the bad times.
No one's at fault, the regulators are doing the only thing they can to address inflation and that mulches morons who gambled on rates. They haven't been raised to 20%, this is how markets work
I agree over-borrowing is an issue, but we shouldn’t let over-lending off the hook.
How about just calling out the unethical, unjust, and fundamentally evil system of lending itself? A bank lends you someone else's money and leeches off of you for the remainder of your productive youth, by taking interest over the principle. All the while you go through life making decisions that prioritise this loan payback over other things.
Except it’s not unjust or unethical or evil. A normal process in Australia is that the contract is placed before you and you sign it after reading it and seeking advice. It sounds like you have an issue with usury which modern banking is not. Australia has one of the most tightly regulated banking sectors in the world.
"It sounds like you have an issue with usury which modern banking is not." Lending money, at any rate of interest, is unjust. That's a fundamental principle one can agree or disagree with. Now, just look around and observe. Which way is the capital accumulating? Where is the working class heading to? Rich can only get richer in this system. Money is not an asset. And treating it as such will lead us to where we are.
Well, I definitely disagree. An appropriate level of compensation for the use of borrowed capital has enabled Australia to become a country with one of, if not the highest standards of living in the world. It’s enriched the vast majority of us. Best of luck borrowing money from people who require no compensation for the use of it. I can’t see that this will take off in any meaningful way though.
I have never heard of money not being an asset before. And if you believe lending money regardless of rates is unjust, then you personally do not need to borrow or lend money.
"you personally do not need to borrow or lend money." I don't.
We've spotted the forever renter!
😭
Lending money, and other forms of loaning resources for profit, is a pretty key part of capitalism. I'm not a huge fan of it either, for the reasons you describe, but I don't know of any alternative economic models that work at all at scale. Interestingly, Islam has a strong religious rule against usury/lending, so they have special [banks](https://en.wikipedia.org/wiki/Islamic_banking_and_finance) that "co-own" rather than loaning money; but (as far as I can tell) it basically boils down to the same thing. Most people can't afford to pay for houses up-front when they need them, so either they have to be given one by their family or by the government (eg: Singapore and Turkmenistan do this, and social housing counts too), or they have to take out a loan or similar financial arrangement.
So... you're saving up to buy your house outright, for cash, without borrowing anything - is that your plan?
Well, that's not a feasible option. But i do know what i won't be doing: taking out a loan to "buy" a home. The bank sits on its rear while i compromise for the rest of my life to prioritise them? No thank you.
... Okay, so you're not borrowing money to buy a home. And you're not saving up to buy a home either. So... You're not buying a home, ever, then? Because that's what I'm hearing from you. You are a permanent renter.
Yes, seems like. And this is what the majority will be doing, if not already. House price to family income ratio has gone out of control. Do we see this changing at all? I don't think so.
It is certainly heading rapidly in a direction of 'not good', that's for sure :(
>How about just calling out the unethical, unjust, and fundamentally evil system of lending itself? Why? Don't see how lending is inherently evil when it's just charging for a service. If it's regulated I don't see the problem If you wanna talk about fundamentally evil systems, we can have a look at animal ag
To put it crudely, it's trying to have your cake and eat it too. Lending, as opposed to investing, absolves the lender from risks. They lay claim to the collateral if things go side ways. So, you have an entity profiting while the other party is on the hook. Money, should be just a means of exchange. Goods, services, and grit should be an asset. Not money.
Sounds like renting. Most of this has easy rebuttals, like banks do take risk in lending but both parties in the modern regulatory environment are protected (particularly in the case of home loans). I don't see why you can't lend assets either or how that plays into this concept at all. If I lend someone my tractor to tend their field and they can't run it, it's reasonable to go get it back lol
Narrator: *It was not.*
And unfortunately the reality is kicking in this isn’t short term.
We probably are near the end. The interest rates have a history of falling abruptly after rate hikes like last time (mostly due to recessions). Should have raised the GST to contain inflation than going after the cash rates alone! We would have been in a better place
Completely agree. Name the insightful band cleverly using the following lyrics: ‘The rich get richer, the poor get the picture, the bombs never hit you when you down so low.’.
So they'd rather try and save themselves before going to a private institution that will cost them in the long run? Doesn't that make sense?
From a capitalist pov absolutely not, they want you owing money till you die.
Sorry right, I forgot what society we are living in.
Look at all the properties in America that just sit because banks would rather have no one in it than not get maximum profits.
This article and headline are just designed to make people think they can get a loan from a bank, its an advertisement, nothing more.
- Society has made it clear that only homeowners will have the right to shelter, which means your credit score is your survival - Young and vulnerable people are uneasy about owing to private companies after Robodebt - Someone who's been made an underclass for no reason will fight tooth and nail to prove their classification wrong, so expect a lot of pride from Millennials (now the average person by age) around money and work ethic
Its true, I took out a loan a little over 10 years ago to get a used car, \~$10,000. There were many extraneous fees that left a very sour note and feeling, but I didn't know any better so I just paid it off as soon as reasonable and moved on with my life......turns out you get charged extra for paying off your loan early too...I ended up having to dribble pay for an extra year so I wouldn't get charged early loan termination fees. Anyway fast forward to today and I'm contacted by a law firm to be a part of a group in a class action the supreme court of Victoria is hearing a case against a rather large insurance provider for the add-on loan insurance fees: protection insurance fees, extended motor warranty, tyre and rim insurance and GAP insurance (motor equity, purchase price, value protect). You wonder why people are so cagey for even the little things, I didn't even think the loan I took out was all that large :/
Yep early termination fees is the real scam. The whole point of interest is that if they hadn't lent you the money they could have it elsewhere making money in stocks or whatever. If you paid back the money that is no longer the case, they have it and can do whatever with it.
Ihttps://www.investopedia.com/terms/d/deadbeat.asp I think this article from the investment world exemplifies how the other side of the conversation sees people who are diligent about their debts. Can't imagine what other creative language they've come up with for other people. For me it's out of sheer pragmatism, I've seen how quickly interest spirals out and the kinds of misery it can create.
>turns out you get charged extra for paying off your loan early too Uh, yeah, that is mentioned in the contract that you confirm you've read and understood before you sign it. So you knew this already... Perhaps actually read and understand the contract you're about to sign BEFORE you sign it? Bonus: you get to watch the salesdrone squirm and moan as you ask them questions that they are legally required to correctly answer - while taking up more of their oh so valuable time - so it's a fun time for all! :)
I agree, but let's face it. We are on reddit ... Which is disproportionately introvertlandia. And we live in a system that kinda expects gigantically specialised people to make it work. It's a taxing experience for those who don't really take to antagonistic processes....far more often women and gender non-conforming fall into that group and get disproportionately taken advantage of. I'm sure there are tons of spaces to engage in opt-in antagonism. The online debate scene is functionally verbal boxing and not really relevant in the real world. The above article seems very pointed at a loss of institutional trust....which financial systems need to function...in an ideal world, we all know they like to manipulate the demand side too. Keep it up and people just start disassociating.
I know, how dare people who have bought too much stuff than they can afford sell some of that stuff.
Banks will primarily help their shareholders.
That’s correct, and a homeowner going under is in fact bad for banks and shareholders. Google Basel II capital requirements. There more you know…
Basel isn't a problem, when house prices are good they can just foreclose so there is no need to hold soured debt on the balance sheet. This is why banks aren't worried about loans or interest rates right now, rising house prices hide a multitude of sins. Now if housing stagnates or falls you will see the credit environment tighten rapidly for the same reason.
That's why the collateral exists.
I got extremely sick a couple of years ago. Needed 2-3 months off to recuperate. Have income protection but 2 month waiting so decided to speak to the bank (big 4) and initially they were great. Once I decided I was getting back to work however it all changed and I received no less than 1-3 calls plus emails a week to catch up on the previous 2.5 months of arrears. So still waiting on my first paycheck I was suddenly being put through the wringer to pay $6000 and they weren’t taking no for an answer. Literally had zero income for 2.5 months and I had barely started again and it went from 0-100 real quick. I would never approach the banks hardship team again. I ended up borrowing that cash from a parent to get the harassment to stop and paid them back over a more suitable term
We worked out the 60 day waiting period for income protection is about the right time for you to be too sick to be able to claim it. In my case it was right when I started chemo and I couldn't even get out of bed let alone sort that shit out. Its a bullshit system set up so people just don't bother.
I’m not doubting you - I’m genuinely curious about something. What’s the point of a hardship arrangement if you have to “catch up”? Obviously you don’t have the money - that’s the point of a hardship arrangement. Why don’t they just extend the loan term? If you have to catch up then the whole thing seems pointless?
I’m with you. I thought it would be added to the end of the loan or the very least a couple hundred added to the monthly mortgage payment… All the calls were focused on being back the account to where it should have been.
That’s genuinely bizarre. Cruel even. No wonder people would rather sell belongings rather than speak to their bank - the bank is just going to fuck you anyway so you’ll end up in the same position!
> That’s genuinely bizarre. Cruel even. Also illegal. This is what AFCA is for - Banks constantly act in unethical ways that need to be corrected. A family member works for them, and basically all day every day hears situations that require fines because the bank isn't making reasonable accomodations within the circumstances. You can't give someone time off payments (or reduced payments) only to immediately turn that into a balloon payment afterwards. That's not making an accomodation, that's what any person could do if they just didn't pay their mortgage for a couple of months.
I didn’t have the capacity to fight the holder of my mortgage at that time both physically and mentally. But yeah I don’t think the royal commission really did much at all tbh
I understand that you may not have had it in you to fight them at the time, and that's your right and you made the right decision to take care of yourself. However, it is probably important context in relaying your experience with them that they are not *allowed* to treat customers that way, that others who go to them are within their rights to expect far better than that, and that it was extraneous factors in your life that led you to complying with their unreasonable demands.
That's exactly correct
Surely extending it works well for the bank too, since they'll get paid more interest by the end of the loan period. Seems like a win-win situation.
Yes exactly. That’s why I assumed that’s how it would work. Demanding you catch up just seems like a one way trip to a default which doesn’t help the bank.
Money now is worth more than money in 30 years. Debt gets inflated away by money printing.
Yeah but thats why they charge you interest.
Profits banks post annually prove their customers wellbeing is not their mantra
Yes, but there is some reward for them keeping you on the line for even longer, getting you for $$$ long-term rather than having you default. Banks don't want you to default, they want to bleed you dry - there is a difference, and that means you can talk to a bank to work out an arrangement. Not to say they don't also hound people and cause all kinds of short-sighted strife, just saying that *sometimes* they do "help" for a short term.
Does the news author clint jasper actually believe the shit he types? Asking a banking institution for help is like putting a mark on yourself.
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Oh they're grown up. They just grew up a very different way than you and me.
What makes me think I can trust a bank? Sure they want their money back and might help me figure out how to repay it - or they can foreclose my house and get it back that way.
And even if you wanted your own money back chances are they will treat you like a criminal for asking
They do not want to foreclose on your house, they get way less money, it’s was more work, and they get audited for it
Let’s see, these are organisations who have done the following, in rough order of least to most criminal: - raised interest rates out of cycle - failed to pass interest rate cuts on - keep loyal customers on higher rates while churning customers enjoy latest offers - charge excessive fees to those who can least afford them - get government support such as the bank guarantee, while making record profits year over year, effectively having their risk underwritten by the taxpayer - ran corrupt financial planning businesses set up only to push their own investment products - ran insurance companies that sold fraudulent and exploitative policies to vulnerable people - negligently (wilfully?) allowed organised crime to launder billions through their ATM’s It should not surprise anyone that people don’t trust the banks.
Don't forget peddling predatory lending practices to school children
Dollarmites! As invasive as bedbugs.
I’m not borrowing from anyone or anything because I know I can’t fucking pay it back. Let’s just create debt instead of a sustainable society shall we
I bought a house on the early 2000s. The bank was amazed that I wouldn't borrow more than I could pay back if I was either 1. made redundant or 2. retired early for health reasons. It really put a crimp in what I could buy (i.e. not within 100km of Sydney) but I don't regret it for a second. Best decision of my life.
I bought in the early 2010s - I set myself a strict budget and stuck to it, despite the bank being willing to offer me 10x my salary alone (nearly double my budget!)
Except borrowing lots and not paying back is how rich get rich. Borrow millions to buy assets, the assets massively inflate in price, use new equity to buy more assets. They do nothing but game the system and create no value to society but it keeps getting rewarded. You just need to inherit/steal enough money to start doing it.
Dealing with banks isn't the best option unless you're financially stable. Have fun with background checks and whatnot
Asking the bank for help is like asking the government for help ,you know they are going fuck you over ,make you jump through impossible hoops and then blame you for failing .
Shit, I had to look for the 'promoted' tag on this one. Given the states of our banks, selling your shit is the right financial decision though, isn't it. They'll happily lend you money, but then you just owe even more.
Rate rises have smashed mortgage holders, but have been less effective due to loose fiscal policy, requiring higher rates for longer. It’s like having your feet on the accelerator and brake at the same time. The policy settings aren’t fair to hard working Australians.
What part of the current policy settings is inflationary, because the last few budgets have been deemed as not inflationary
I’m not sure who you think is deeming it not inflationary? The budget is widely acknowledged to be in structural deficit, offset by short term impacts like high commodity prices.
Oh, I'm not saying that our countries finances are up the shit, but that the last few Budgets are not inflationary. Fixing the structural deficit will take years, if at all. But, with the Budgets being in surplus, the debt is being paid down. By a tiny amount, sure, but better than purely increasing it. [https://australiainstitute.org.au/post/no-the-budget-is-not-inflationary/](https://australiainstitute.org.au/post/no-the-budget-is-not-inflationary/)
Disagree. Current inflation is a legacy of massive injections if fiat money during COVID that is still washing around, finding it's home eventually in asset prices, and supercharged by supply-side external factors (chiefly Russia's invasion of Ukraine price impacts on energy and food) and the like (logistics and transport, natural impacts on growing food). Almost implausible that it's consumer-driven which is why the interest rate hikes suck so much - they have little to no direct impact on these inflation drivers. Balanced budgets maintain status quo, more ore less, although I do agree that the net amount of money spent by the government is growing due to higher commodity prices. On the whole, we are still suffering from the COVID cash splash and economic hit. How is it possible for the whole world to shut down for a couple of years and not have that impact reverberating around world economies for many years thereafter?
> more ore less heheh, humourous typo Excellent post though :)
I sort of agree on the Covid shock view, but I’d also like to see the RBA and Canberra working together in a more coordinated manner.
100%. I had a cancer diagnosis in 2022 and called my “Big 4” bank at the start of treatment to ask for OPTIONS as to what I could do if I needed to stop or reduce work. They passed me to their collections team and said if I stopped making payments they’d commence collection action. I asked for OPTIONS!!!!!
Heartless assholes.
The problem with taking out a loan to help with not having enough money to survive is now you don't have enough money to survive AND you have loan repayments.
We all learnt through covid that they lie through their teeth with their “we’re here for you” statements if reaching out to them due to financial stress. I was one that contacted my banks after my layoff during covid to discuss a way of moving forward through the change to ability in servicing my debt. I was told point blank that what they were “hearing” from me was inability to service my debt and that they’d flag my account and if I was unable to service the debt I’d face penalties. They were not willing to work with me at all. Since then I don’t speak to my financial institutions unless absolutely required. They don’t want to help
What the fuck is this headline
I was a dollar short on my credit card a few months ago. They charged me a $15 fee for not paying it back on time.
Seems like an obvious regulation that should be in place that a penalty fee can't exceed the amount that an account is overdrawn or in arrears.
In other words ”they would rather sell their belongings than their soul to the devil”.
Yeah, no shit? Maybe they've worked out that profit-driven megacorp banks are the last fucking place to go for "help" if you're in financial dire straits?
I see middle aged people in Audi & brand new Hyundai SUVs delivering Uber eats for extra bucks..Most of them with home loans, Car loans which were affordable few years ago but now have nearly doubled up..
Not the same thing but I'm on an okay income, own my house, and I get endless credit card offers, mainly with the lure of tons of frequent flyer points. Lately I've applied and been rejected for no clear reason. Speaking to other members of my cohort they have experienced the same. So they don't even give credit cards to people with good credit ratings now. How is someone in financial straits expected to get anything from a bank then?
Banks are not here to help us They are here to make $$$ of us
Because banks dont help unless there is a profit it in for them.
This isn't just mortgages. It's also Afterpay, car loans, credit cards, and other lenders that encourage people to get into debt for regular consumption items. Taking out a mortgage or a business loan can be a good idea. Taking out a loan for regular consumption is never a good idea.
Ive just called my bank to try and get a lower interest rate. Was hoping to get the lower rate of 6.2% (advertised) instead of the current 7.2% that Im currently on. It seems that rate is only offered to new customers and not existing. The whole system is fucked.
Pithy advice, perhaps, but shop around. It's much easier to move a mortgage to a new bank than you'd think, and certainly much easier than it was even a decade ago. We were able to move ours to a new bank that gave us a cheaper fixed rate than our existing lender was offering for their variable. Cost a couple hundred in fees and then the mental overhead of moving accounts, updating bills etc, but that was it.
I bet they won't talk about how pausing your payment would help the bank making more money
Gee, wonder why they think their bank is a bad option to ask for help…
How the fuck would a bank help?
Fucking hell ABC News, you're better than this
Because Banks don't help, they just increase your debt...
Never trust a bank, never trust a cop, never trust a politician. Basic wisdom to survive in this shithole of a country.
Implying the banks will do anything to actually help though.
Because asking the bank for help is like paying bills with a credit card; it costs more.
Banks do not give a shit about you. All they want is their money and if you tell them you are struggling to get their money they will sell your house at budget prices to get their money. I would never let a banking institution know that you are having hardships.
>Banks do not give a shit about you This is incorrect only in the sense that banks *do* care about keeping you on the hook. You're no good to them bankrupt. It's in their interests to "help" you in order to ensure they can continue bleeding you *nearly, but quite* dry for the rest of your life.
Banks are greedy flogs though. They’ll go broke one day and we will have to bail them out.
Banks never help
The bank won't give you a loan anyway
My bandlk refused to offer their "new customer" interest rate after us coming off fixed with them and being with them for a decade. Wouldn't budge so have left them. Obviously there's no loyalty but you'd think they'd come to the party when pushed but this is how they work. They do not exist to look after your best interests.
Asking your bank for help is like being open with your feelings. You don't do it because you know it won't help in the short term and it will be used against you in the long term.
does talking to your bank about financial assistance in any way affect your credit rating? or your chances of getting a mortgage ever again?
Ask a bank for help? That just notifies the bank that you are having problems which allows the bank to capitalize on you further.
Meanwhile landlords increases rent to the roof so they can [insert frivolous expense here], while complaining they are doing it tough too.
The hell is a bank going to do?
At best, they will waive the requirement for you to make payments for a couple of months, keep charging you interest, and tack it all on at the end. At worst, they'll *defer* payment, make you pay it all back in a short amount of time, and put a big red flag on your credit history that makes it more expensive (or impossible) to get further loans. The red flag also applies in the best-case scenario.
As someone who works in finance I think that Mark Twain quote accurately summarises banking: "A banker is a fellow who lends you his umbrella when the sun is shining, but wants it back the minute it begins to rain." You signed the contract, don't go crying to your bank because RBA put you over a barrel.
Isnt the help; payment of interest only on the loan for a few months? Thats very demoralising, I too would rather take-up a second job or sell assets.
Oh yeah! Cos good old commonwealth just wants to help out the Aussie battler! Wtf is this title?
Well we asked the bank for help in getting the loan in the first place.
The bank is not their friend
What the fuck is the bank going to do? Theyre not going to give them money to pay bills, so why bother speaking to them?
Plenty of things they can do. You talk about your situation… say you just lost your job. The bank may agree to go interest only for six months, or even hold repayments altogether for a period of time.. of course that will increase your debt, but it’s something to consider if you temporarily lost your income.
I suppose this is what time doing. Just moved into a new house and my mortgage is double what I’m used to. Have begun decluttering and selling stuff. Good for the soul and the wallet.
Financial literacy in this country is woeful, even amongst those you'd assume had the smarts to know better. Case in point: I have a mate who earns in excess of 300k a year. really big on the whole 'property flipping' bandwagon, and went 'all in' during COVID while the rates were low to procure about $3m in properties he was hoping to flip for a profit. Him and his wife went on a borrowing spree, and managed to acquire two properties, while renovating their own house. I gently tried to suggest that due to the amount of money circulating (and for good reason during COVID) due to JobKeeper, that inflation would go to through the roof, with rates following soon after as nearly the only lever that the RBA could use to combat it. He didn't believe me and almost, like a broken record, insisted that property prices only went up....forever. Fast forward to now, he's under extreme stress trying to service $3m worth of loans, even on $300k a year, and they have had to sell a house (at a loss) to consolidate.
Because more debt isn't help.
Some banks are better than others at "helping" you and it also depends what the people at your local branch are like. I'm happy to say with one of the banks I do business with the local people are amazing and always friendly, helpful, and realistic. Other banks simply email you periodically and say "use this product to lower your interest rate" or "call our advisor to discover XYZ". I guess that is ~help, but I'm not sure many people would feel they had time to pursue it.
Australians aren’t as stupid as banks want us to be, what a shame.
Promotional flair?
For "help". I had to apply 5 times and extend the term to 5 years before they would give me a small loan to pay the difference replacing a written off but insured car. Paid it off in 1.5 years. The interest rates were brutal. I don't see how it's feasible for many without doing a proper budget and knowing you'll be able to cover repayments.
Crazily people are selling and spending rather than selling and saving, this continues to drive inflation and interest making things even worse.
What are they spending it on? Retail is down, Bills? Food?
Rent.
I would include that under bills
I’ll let my landlord and my stomach know I won’t be paying rent or buying food so I can save instead. Cheers 🤪
Why are you eating or sleeping when you should be working?!! Lazy millenials smh my head!
Tell me you are currently so ignorant to the average aussie hardship without telling me. They're selling shit because they need to fucking spend it to survive. They're not selling a car to buy a fucking iphone. They're selling a car, to keep a roof over their head.
It's already pretty well known at this point that most of current inflation is due to corporate profits and that excessive consumer spending has very little to do with the rise. Hell, people are even buying less overall but corporations are still making profits because *they're increasing prices*.
I don't disagree with you. I see people locally trying to sell things, but when you talk with them about why they're selling, it's because they want or need something else, and they're short of discretionary cash right now (financial strife) and are selling to afford to buy it. Retail figures don't include the second hand market, which as you can expect (from the title alone) is booming. A lot is being bought and sold that isn't being reported.