New data showcases first home owner sensibility
One in four first home owners say their interest rate would have to more than double before they felt financial strain.
According to Mortgage Choice’s annual First Home Owner Survey, which canvassed the opinions of first home owners who purchased within the last two years, 25.3% said they could comfortably afford at least a 4% increase in interest rates.
“A further 36.8% of surveyed respondents said they could afford at least a 2% increase in interest rates,” local South Perth’s Mortgage Choice broker Nathan Bottrell said.
“Given that interest rates generally rise in increments of approximately 25 basis points, the majority of first home owners believe they could comfortably afford at least eight interest rate rises.”
In the survey, first home owners were also asked whether or not they had considered refinancing their mortgage following the recent rate movements by many of Australia’s lenders and 59.1% said they had not.
“It would appear as though first time owners are currently very comfortable in their home loan product, with the majority willing and able to make extra contributions to their mortgage each month,” Mr Bottrell said.
“More than 56% of first home owners said they were making additional mortgage repayments on a regular basis.”
“Of those first home owners making additional repayments, 63.4% said they contribute as much as they can afford to their mortgage each month.”
“This just goes to prove that the majority of first home owners are diligent and savvy with their money. They understand that interest rates are sitting at historical lows and as such, are keen to pay off as much of their mortgage as possible while their rates and monthly repayments are low.”
“First home owners are acutely aware that interest rates will rise eventually, so they are keen to make hay while the sun shines.”
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