October 23, 2013
More than half of first homeowners who purchased within the last two years are considered to be in mortgage stress, new research has revealed.
According to Mortgage Choice's recent First Homeowner survey, 53% of respondents are contributing more than 30% of their after tax income to their mortgage.
The annual study revealed that first homeowners in South Australia are struggling the most, with 60% considered to be in mortgage stress. This is compared to 54% in Western Australia, 52% in both Victoria and Queensland and 50% in New South Wales.
Mortgage Choice spokesperson Jessica Darnbrough said that while these are worrying statistics, the survey also shows the majority of Australians continue to make additional mortgage repayments.
Almost two-thirds of the surveyed respondents (62%) said they made additional mortgage repayments whenever possible, with 37% putting as much as they could afford towards their mortgage each month.
In addition, over half (53%) of the respondents said they had not changed their repayment strategy, despite the fact that many lenders have trimmed their interest rates in line with the Reserve Bank.
“While it is tempting for first homeowners to reduce their mortgage repayments in line with any recent interest rate cuts delivered by their lender, it is comforting to see that mortgage holders have such a responsible attitude when it comes to their home loan,” said Ms Darnbrough.
“Paying extra on your mortgage now can provide you with a certain level of comfort, knowing that you will be able to make your mortgage repayments if and when interest rates rise in the future.
“Of course, contributing more than 30% of your after tax income to your mortgage repayments may not be a comfortable solution for everyone. For those who are experiencing mortgage stress or feel as though they may be getting into financial difficulty, help is available.
“A mortgage broker can help you assess your financial situation and find a suitable solution for your needs, both now and into the future.”
Visit your local mortgage broker for a free home loan health check today. Call 13 77 62, or visit Facebook.com/MortgageChoice or Twitter.com/MortgageChoice.
For further information or to arrange an interview, please contact:
Lauren Booke
Mortgage Choice Corporate Affairs
(02) 8907 0502 / 0448 240 047
Lauren.booke@mortgagechoice.com.au
Amity Harrold
PPR
(02) 9818 9334 / 0434 975 868
Amity.harrold@ppr.com.au
About the survey
The Mortgage Choice 2013 Future First Homebuyer/Recent First Homeowner Survey of 1,000 Australians who were looking to purchase their first home in the next two years or who bought their first home in the last two years ran online in September 2013.
Important information
This article is for general information purposes only. It has been prepared without considering your objectives, financial situation or needs. You should, before acting on the advice, consider its appropriateness to your circumstances.
