Rate hike impacts Australians across the spectrum at Melbourne Cup

As the crowd enjoyed performances by Robbie Williams and indulged in celebratory drinks, many attendees shared how the rate increase is affecting their lives in vastly different ways.

For Anthony and his partner, the rising cost of living has dashed their dreams of homeownership. “We were saving for a house but realised it’s almost unattainable,” Anthony explained. Instead, they’ve opted for a global snowboarding adventure, recently returning from Europe and planning a trip to Japan.

Christine, a homeowner, expressed frustration with the decision. “Please, stop. Just stop,” she jokingly pleaded, highlighting the financial strain on many.

While higher interest rates benefit savers and those who have paid off their mortgages, like Craig, a retired man, the impact on those with mortgages is significant. Approximately one-third of Australians hold mortgages, often on variable rates, leading to increased repayments. Another third rent, many facing rising costs due to landlords with mortgages.

Craig voiced concerns about the burden placed on mortgage holders, wishing for greater government action to address inflation. The government has several options to combat inflation beyond interest rate hikes, though these are often slow, politically risky, and carry potential unintended consequences.

NAB chief executive Andrew Irvine, speaking on The Business, anticipates a “challenging year” for customers in 2027, noting that while most are managing, they “might not be having much fun.”

One attendee, speaking anonymously, acknowledged the expected rate increase and its impact on his finances. “I’ve got four properties, so it’s gonna hit our budget quite hard,” he said.

Despite the financial concerns, the atmosphere at the Melbourne Cup remained festive. However, the true impact of the interest rate decision will likely be felt the following day.