Home loan costs hit Christmas plans

The majority of Australian homeowners are pondering Christmas cutbacks this year due to the impact of rising interest rates, new research shows.

A national survey by Loan Market found that 62 per cent of the 452 respondents would be reassessing their spending plans for Christmas due to recent interest rate hikes.

Earlier this month, the Reserve Bank (RBA) lifted the official cash rate to 4.75 per cent – a move that was followed by even bigger rises to standard mortgage variable rates at the "big four" banks.

According to Loan Market, 35 per cent of respondents said the RBA had "turned Santa into Scrooge" while 17 per cent said they would be cooking up sausages at Christmas rather than prawns or other festive season treats.

However, 38 per cent of respondents said it would be "Christmas as usual" despite the rate increases.

Homeowners aiming to improve their finances can choose to compare home loans and other money products before switching provider. Loan Market chief operating officer Dean Rushton said: "Many Australians won't be tucking into turkey this Christmas because the interest rate increases during 2010 have hit them so hard."

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