Struggling with Mortgage Payments? You are Not Alone: 1.2 Million Aussie Households Affected
Struggling with Mortgage Payments? You are Not Alone: 1.2 Million Aussie Households Affected
The information on this website is general in nature and does not take into account your objectives, financial situation, or needs. Consider seeking personal advice from a licensed adviser before acting on any information.
The impact of rising mortgage rates on Australian households is a growing concern, according to Roy Morgan Research.
The research firm has conducted a study that models the effects of the current 3.1% increase in the Official Cash Rate (OCR) and the possibility of two more 0.25% rate hikes in February and March.
The findings show that 23.9% of Australian mortgage holders, or 1.1 million households, are already categorized as "At Risk," meaning their mortgage payments exceed a certain percentage of their income. This is the highest level of mortgage stress since July 2013.
If the Reserve Bank goes ahead with the 0.25% rate hikes, the study predicts that mortgage stress will affect 1.2 million households, or 26.3% of mortgage holders. Roy Morgan cautions that this is a conservative estimate and does not account for other factors that may affect the ability of households to pay their mortgages, such as job loss.
Since April 2022, average variable mortgage repayments have increased by 41%, and a further 0.5% rate hike could push them up by 48%. This would result in an additional $1,071 per month for a borrower with a $500,000 variable mortgage.
Another factor adding to the stress on mortgage holders is the expiration of rock-bottom fixed mortgage rates that were offered during the pandemic. Approximately 40% of mortgages originated during this period had rates of around 2.25%, and two-thirds of these will reset to higher rates by the end of 2023, putting even more pressure on already stressed household budgets.
Please Note: We do not endorse any specific products or companies. Some content is sourced from third parties, including press releases, and may not be independently verified for accuracy or completeness.
The Federal Court has imposed a $1.55 million penalty on Money3 Loans Pty Ltd for breaching responsible lending obligations in providing car finance to vulnerable consumers. This ruling underscores the critical importance of adhering to responsible lending practices, especially when dealing with financially susceptible individuals. Find out now if you qualify and compare rates, offers and options from multiple lenders - without a credit check! - read more
The Federal Court has imposed a $7 million fine on Cigno Australia and BSF Solutions for operating an illegal payday lending scheme that violated Australian credit laws. This significant penalty highlights the ongoing efforts to protect consumers from predatory lending practices. Find out now if you qualify and compare rates, offers and options from multiple lenders - without a credit check! - read more
Latitude Financial has recently been fined $3.96 million by the Australian Communications and Media Authority (ACMA) for breaching spam laws by sending over 2.3 million marketing messages without accurate contact information and 344,416 messages lacking a functional unsubscribe option. This marks the company's second significant penalty for similar violations, following a $1.55 million fine in 2022. - read more
Creating a sturdy financial foundation is essential for Australians navigating the often turbulent waters of debt. A bulletproof budget does more than just track expenses; it acts as a buffer against unexpected financial downturns and provides a clear path toward financial freedom. Comprehending the full weight of this importance is the first step to turning one's financial destiny around. - read more
Australia, with its expansive coastline and spectacular waterways, naturally cultivates a rich culture of marine enthusiasts. Imagine the salty breeze on your face as you slice through waves, the call of seabirds overhead, and the freedom to explore hidden coves and beaches – this is the quintessential Australian boating lifestyle. - read more
Welcome to the world of savvy home financing! Whether you’re a first-time homebuyer or seasoned investor, navigating the ocean of home loan options can be daunting. In this digital era, one tool stands out for its effectiveness in simplifying this journey: the online home loan calculator. - read more
Knowledgebase
Loan Origination Fee: A fee charged by a lender for processing a new loan application, typically expressed as a percentage of the loan amount.