Yahoo Finance Millionaire retiree's selfish interest rate rant slammed by young Aussie: 'Five investment properties'
A man in his 70s wants the rate to go up because it will help his retirement, but 26-year-old Maddie Walton was baffled by the comment.
A young mortgage broker has pulled up a retiree who wants the Reserve Bank of Australia (RBA) to lift interest rates. Aussies are already struggling under the weight of their repayments due to successive rate rises, with some forced to sell up while others are holding out hope there could be a drop in the coming months.
Maddie Walton told Yahoo Finance about the willing sacrifices she'd made to keep her house as her repayments kept climbing. But the Queenslander didn't anticipate the "boomers and retirees" so openly betting against her and was shocked by comments a local in his 70s made about keeping rates high on her morning walk.
"I was like, 'Sorry, why would you want that?' Like, no one can afford that," she said.
"And he was like, 'Well, I've got $3 million dollars in super, I have five different investment properties. I want the interest rates to go up to better my future and my retirement'."
Do you believe interest rates should go up? Email stew.perrie@yahooinc.com
Walton bought her first property at 23 after working two jobs and putting in up to 80 hours a week to save for her deposit. Since then, she's not been able to "save a cent", leaving her wondering if her dream of owning her own home was "worth it".
"I've just been trying to battle the mortgage. And the thing is, nothing extra is going to pay my mortgage down. It's all just the interest, which is probably the most frustrating thing," she said.
"I've now rented out both the other rooms in my place. I sacrificed my ensuite and I'm in the smallest room in the house."
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That's why this retiree's comments struck such a nerve with Walton, who she described as "narrow-minded".
"There's the boomers or the retirees that are loving the higher interest rates in their term deposits, in their savings accounts, and their supers," she said.
But that's not the case for many hard-working Australians. She said older Australians should rightfully enjoy their hard-earned money, but called for compassion when so many others are finding it hard to get the same head start.
"I just don't think that we should struggle, this generation, just because previous generations have struggled," Walton said.
"They should be able to spend their money for retirement how they want to, but I think that there is a balance on still being sympathetic to the economy we're in ... to the younger generations and what they're going through."
Financial struggle crosses intergenerational lines
The man Walton spoke with told her he bought his first property for $40,000 and was only earning $160 per week or $8,320 per year. That means his home cost nearly five times his annual salary.
The average Aussie salary at the moment is $1,888 per week or $98,176 a year, according to the Australian Bureau of Statistics, and the mean price of residential dwellings is $933,800.
That means people now are buying properties that are nearly 10 times their salary.
A typical home loan lasts for around 25 to 30 years, however research from HtAG Analytics published last year showed it's taking some Aussies far longer to be finally free.
The average time spent paying off a home loan can exceed 40 years in New South Wales, is about 38 in Victoria and Tasmania, or on the lower end of the scale about 27 years in Queensland.
This particular retiree's experience doesn't represent the majority either. With compulsory superannuation not introduced until 1992, many didn't get a chance to build their nest egg in the way younger Aussies will.
Some retirees are being forced to delay leaving work, or are returning so they can afford to put food on the table.
A survey by National Seniors Australia found money was the top reason 60 per cent of pensioners and 46 per cent of non-pensioners decided to return to work.
“Many are going back to work because of those positive experiences but there are a number of them [who are] struggling and, in particular, those that are renting,” National Seniors CEO Chris Grice told Yahoo Finance.
“They are going back to work for a couple of days in order to try and supplement their income to help them meet the rising costs.”
The government are being pressed to do more to address the housing crisis, with fears ambitious targets for new builds simply won't be met.
Dwindling supply and fears not enough housing
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