The Reality of the Budget

Help!

I really need advice. I’m a single mum of three (14, 12 and three years old). I bought a townhouse when rates were low, and locked in a fixed rate at 1.9%. It was already tight with my budget. But now that rates are rising, I simply won’t be able to afford the mortgage when the fixed rate period ends. So do I sell now and cut my losses? Or do I hold until I am completely broke and wait for the market to recover? I reckon I have three months (six months tops). I feel like I’m gambling with all that I have.

Desperate single mum

Hi desperate single mum,

There are people reading your question thinking “why would a low income earner do this? Surely you knew that rates were going to rise?”

Well, you could ask the exact same thing of our politicians, who have created schemes that incentivise people to get into this sort of situation.

Case in point: in this week’s budget the Treasurer was crowing about their ‘Help to Buy’ program, which allows low-income earners and single parents like you to buy a home with just a 2% deposit.

Now I’m not a gambler, and as a single mother you shouldn’t be either.

Keeping a roof over your kids’ heads is your first, second, and third priority. And it doesn’t matter if it’s rented or owned – just that you have one.

So it sounds like you’re going to have to make some tough decisions, which are best discussed with a financial counsellor (see the number above).

Scott.