A construction project manager has sparked backlash online after complaining about struggling to keep up with the mortgage repayments for his investment property.
Sydney-based Brendan Addison spoke to the Australian Financial Review on Tuesday after the Reserve Bank of Australia announced its 12th consecutive interest rate hike.
Mr Addison said he would need to find extra work on the side to make the mortgage repayments on his home and an investment property that he bought a couple of months ago.
He said if interest rates continued to rise, it would get “really terrifying” as he is a single-income household and the investment property was already not earning enough to cover the mortgage repayments.
“I don’t want to lose my investment because I’m hoping to hold on to it for the next 10 years, but it’s getting really tough. I mean where would interest rates stop rising?” he said.
But his story was met with little sympathy online, where he was labelled “out of touch” and deserving of “zero sympathy” in the current economic climate.
“This guy has two mortgages. Surely he knew that rates might just increase? It’s the battlers with a single mortgage on the family home we should be worried about,” one person wrote.
The report even attracted the attention of property research analyst Cameron Kusher who asked, along with others, why the man didn’t just sell his investment property.
Further comments have been restricted on the publication’s Facebook and Twitter post.
Earlier this week, “Barefoot Investor” Scott Pape wrote in his column that it was time for Australians to make the financial decision they were putting off.
“Perhaps it’s selling that dud investment property … or downsizing from your current place,” he wrote in a list of examples.
Mr Pape said people needed to stop making excuses and take action.
On Tuesday, the Reserve Bank of Australia increased the cash rate for the 12th time since May last year – making it the highest the cash rate in 11 years.
It rose 25 basis points, bringing it to 4.10 per cent.
Treasurer Jim Chalmers said a lot of Australians would find the decision “difficult to understand and difficult to cop”.
And Reserve Bank boss Philip Lowe has warned Australians to brace for further rate hikes.
Dr Lowe said he understood that many Australians were experiencing a “painful squeeze” on their finances.
He conceded inflation had passed its peak but said its current level, 7 per cent, was still well above the central bank’s 2-3 per cent target.
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“This further increase in interest rates is to provide greater confidence that inflation will return to target within a reasonable time frame,” he said.
Graham Cooke, head of consumer research at Finder, said Aussies with an average loan size of $577,000 will be spending over $15,000 more per year on their mortgage compared to what they were in April last year.
“That’s an additional $1,200 every month – a huge amount of extra money to be forking out on your mortgage,” he said.
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