An Australian mother has sparked debate after claiming a six-figure income is not enough for a family of three to live “comfortably”.
Melbourne, mother of one Lou, of That money momHe told WhatsNew2Day Australia that his family had to adjust their spending habits because their mortgage payments doubled due to rising interest rates.
“Two years ago, my husband and I made $150,000 a year,” she said.
‘We didn’t have children, our mortgage was $800 and we could easily save $1,000 every fortnight without trying very hard.
‘In the last two years, we had a baby, I worked part-time and our mortgage increased by $800 a month.
“Our car insurance jumped from $800 to $1,100, our corporate entity went up $50 per quarter, Netflix went up, Spotify went up, and let’s not even talk about purchases.”
Lou added that increasing budget pressure meant his family “has to be frugal.”
“We count every dollar so we have a little left for our mortgage,” he said.
“It seems crazy to say it because $140,000 seems like a huge number, but for three people – two adults and a baby – with a mortgage in this economy, it doesn’t seem like a lot at all.”
An Australian mother has sparked debate after claiming an income of $140,000 is not enough for a family of three to live “comfortably” (file image)
Australian borrowers are now paying 59 per cent more for their mortgages than they were three years ago, and financial markets now expect even more rate rises in 2024.
She defined comfort as the ability to enjoy some luxuries without worrying about finances.
‘We are the lucky ones. I think to be comfortable you would have to earn more, like $170,000, but it would depend on your debt,” she said.
“We would be more comfortable without the mortgage.”
Hundreds of Australian mothers agreed, saying they were struggling to earn incomes that would have allowed them to enjoy a “good life” a few years ago.
‘I’m down to $100,000. No kids and struggling to balance saving and having fun. Definitely $140,000 is not a comfortable income for three or more people,” said one of them.
Another wrote: ‘$140,000 is the new $80,000. My husband and I make $200,000 and have four children. We live on the stricter side of comfortable.
A third said: ‘Household of four. Income of $260,000. We feel comfortable but we definitely don’t live the good life. Five years ago we would have felt like royalty.’
Another said: “We have about $170,000 for a family of four and two pets and we feel the same as when I was on maternity leave and earning $100,000 five years ago.”
But others said $140,000 was more than enough to survive the cost of living crisis.
“I’m a single mother of three and we get by just fine on $46,000 a year.”
For a borrower with an average mortgage of $600,000, monthly payments have increased from $2,431 to $3,868, or $17,244 a year.
A second added: ‘We’re a family of three earning $150,000 a year and we’re comfortable saving for vacations or renovations.
‘I think it depends on the debts and the mortgage. It makes a big difference. We have no car loans or debt, and our mortgage is $2,000 a month.’
A third said: “I’m a single mom on a $55,000 salary.” But somehow I make it work. And I manage to save and my daughter is left with nothing.’
Australian borrowers are now paying 59 per cent more for their mortgages than they were three years ago, and financial markets now expect even more rate rises in 2024.
In April 2021, Commonwealth Bank, Australia’s largest property lender, was offering variable mortgage rates of 2.69 per cent.
But three years later, variable rate borrowers now pay 6.69 percent.
For a borrower with an average mortgage of $600,000, monthly payments have increased from $2,431 to $3,868, or $17,244 a year.
Someone with an $800,000 mortgage (buying a $1 million home with a 20 per cent home loan deposit) would have seen their monthly payments rise to $5,157, up from $3,241.
That would equal a $22,992 increase in annual mortgage costs.
And despite rate rises, house prices have soared in Australia’s capital cities as immigration reached record levels, adding yet another hurdle for those struggling to buy a home.
The median house price in Sydney rose 10.7 per cent over the last year, but in Brisbane it rose 15.9 per cent and in Perth 20 per cent.
