>
Debate rages between Boomers and Millennials over which generation had it harder as a three-decade-old home loan document shows sky-high repayments
- An angry debate ignites over the old home loan document
- Document shows high interest rates for borrowers in the 1990s
- Disagreement over which generation has the most struggle
An old home loan document showing high interest rates in the 1990s has sparked a raging debate over which generation had the hardest time buying a place of their own.
A member of the Perth Reflects Facebook group posted a photo of an ANZ document from March 1996 setting out the bank’s various interest rates on owner-occupied and investment property.
“I found this in our filing cabinet (1996) and was wondering what interest rates others were paying on their first home loan,” the caption with the photo read.
The Easy Start loan on owner-occupied homes was the cheapest at 7.95 percent, while an adjustable mortgage came in at 10.50 percent and fixed rates started at 8.69 for a one-year term. and increased to 9.69 percent for a period of five years. term.
ANZ’s basic variable rate is currently 5.09 percent with fixed rates offered from 6.24 to 7.64 percent after the Reserve Bank ruled nine consecutive monthly increases that brought the cash rate to a 10-year maximum of 3.35 percent.
A Facebook user has posted an old home loan document showing the highest rates banks charged in the mid-1990s.
A furious debate raged over which generation had the hardest time buying a place of their own (file image)
Some of those who commented recalled much worse rates.
“Late 80s, initially paid 17.5 percent, but it was variable,” said one person.
‘Those with fixed interest at the time thought they had it much better at 14.5 per cent.
However, the youngsters said that the comparison with today’s lower rates does not add up.
‘Yes, but the houses were a fifth of the price,’ said one person.
‘Prices were low, interest rates were high, and everything was affordable.
‘Regardless of whether wages have increased, everything else has doubled.’
But one person who bought a house during that time dismissed the idea, explaining the sacrifices he made to buy a house with the highest rates.
‘We drank coffee at home and only ate out occasionally, life was much simpler then…’ they said.
A younger potential homebuyer scoffed at the comment, rejecting the trope that it’s the Millennial generation’s lack of frugality that prevents them from climbing the property ladder.
“I have coffee at home too,” the person wrote.
I never buy lunch and the last time we went for dinner was four months ago.
To resolve the argument, a member of the group processed the numbers.
Younger people said comparisons between the 1990s and today’s lower rates don’t add up (file image)
‘$44K for a 3-bedroom house in 1986 but I was making $31K a year. So maybe things weren’t so difficult with an interest rate of 16 percent,” wrote one.
“If adjusted for inflation, your current income would be $92,000 PA and the price you paid for your house would have been $131,000,” another replied.
‘Even with 16 percent interest rates, living in 1986 sounds pretty good to me!’
One Boomer was particularly sympathetic to the modern struggle to fulfill the great Australian dream.
‘Yes, 17.5 percent and we fought through it,’ they said.
‘However, the difference is that my home loan was much less than what my children are paying today.
‘New build house and land in High Wycombe, the loan was around $130,000.
‘Now you struggle to find a house for that in a country town for that.
“And the annual salaries are different, but housing affordability has gone stupid and salaries don’t increase accordingly.”