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.
Published:Monday, 30th Jan 2023 Source: Paige Estritori
Please Note: If this information affects you, seek advice from a licensed professional.
In a remarkable demonstration of Australia's thriving asset finance sector, Loan Market Group's Asset Finance Exchange (AFX) has reported approximately $80 million in settlements within its inaugural year. This achievement underscores the platform's effectiveness in connecting brokers and asset finance specialists, thereby streamlining the financing process for clients. - read more
Australian Motorcycle & Marine Finance (AMMF) has joined the Australian Finance Group (AFG) panel, marking a significant expansion in asset finance options available to Australian brokers and their clients. This partnership is set to provide more tailored financing solutions for individuals interested in acquiring motorcycles, marine products, and related accessories. - read more
Loan Market Group's Asset Finance Exchange (AFX) has achieved a significant milestone, reporting approximately $80 million in settlements within its inaugural year. This accomplishment underscores the platform's effectiveness in connecting brokers and asset finance specialists, thereby streamlining the financing process for clients. - read more
Debt consolidation is a strategy often utilized by individuals seeking to take control of their financial health. At its core, debt consolidation involves combining multiple debts into a single, more manageable loan, typically with more favorable terms such as a lower interest rate or a longer repayment period. - read more
In today’s economy, a good credit score is more than just a number—it's a pivotal element of financial health that can open doors to necessary funding when it's most needed. Whether it's for purchasing a new home, investing in a business, or obtaining personal loans, a robust credit score in Australia is your ticket to favorable interest rates and loan terms. - read more
When you're on the journey to owning your dream home, securing the right home loan is as critical as choosing the perfect location. The benefits of using online home loan calculators can't be overstated, as they wield the power to illuminate the murky depths of mortgage rates, terms, and payments with surprising precision. - read more
Knowledgebase
Cost of Capital: The required return necessary to make a capital budgeting project, such as building a new factory, worthwhile.
