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Date Published : Friday, April 11, 2008
Australia's high interest rates are hurting more consumers than first thought, according to a new report.
This month, the Reserve Bank of Australia voted to keep interest rates at 7.25 per cent, after two successive rises left rates at a 12 year high.
As a result, an increasing number of people are using credit cards to cover the recent interest rate rises and the resulting mortgage repayment increases.
Aussie Home Loans consumer and commercial business managing James Symond told the Australian: "A lot of people have maxed out their credit cards to cover their home loan repayments."
However, according to the publication, it is not only home loan customers who are suffering.
It claims that the focus on rates charged on mortgages - which affect millions of people across the country - could soon shift to business bankruptcies.
Small businesses, such as carpenters and plumbers, are struggling to survive as many of the people who would employ such services can no longer afford to - due to ever increasing mortgage repayments.
PPB insolvency partner Mark Robinson said that the area where the squeeze on services was being felt the most is New South Wales.
"In NSW, especially in places like the western suburbs, households have been hit hard by rising interest rates and negative equity in their homes," he told the publication.
"This is having a knock-on effect to small businesses such as carpenters and plumbers, whose businesses are linked to their homes."
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