Aussies feel burdened by their home loans, says Gateway Bank

Friday 28 September 2018

Article by Monika Gudova

As the cost of your morning coffee goes up, your boss announces there’ll be no christmas bonus and big banks hike up their home loan rates, it’s no wonder Aussie’s are feeling the strain on their purse strings.

Aussies feel burdened by their home loans, says Gateway Bank

New research by Gateway Bank has revealed that a staggering 56% of Australians are under mortgage stress, and consider their home loan to be a burden which limits their lifestyle.

CEO of Gateway Bank, Paul Thomas, believes that this number reflects the increased cost of living and household debts plaguing everyday Aussies.

“In the pursuit of getting their foot into the property market, some Aussies have become over-indebted, leading us to record high household debt-to-income ratios of 189%,” he said.

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“Add to this the steep decline in household savings, which is currently at 1%, and you have yourself a recipe for mortgage stress.”

Adelaide residents topped the nation for mortgage stress, with 63% of residents considering their home loans a burden. Perth sat at 62%, and Darwin and Brisbane weren’t far behind with 61% of their population feeling the strain.

Booming investment markets Melbourne and Sydney sat at 58% and 54% respectively. Mozo Property Expert Steve Jovcevski believe these cities could be experiencing mortgage stress due to the price corrections happening in these markets, making it harder to refinance their home as their house drops in value.

“In the last six months we’ve seen a drop in the Sydney and Melbourne property markets, and we’ll likely see the markets bottom out by first quarter next year,” he said.

Rentvestors on the rise, but could they be the under the most stress?

Another key findinding in Gateway Bank’s research was that almost one in ten (9%) of those surveyed were rentvestors: renters who have an investment property elsewhere.

Thomas believes that rentvesting is popular due in part to lenders enforcing stricter lending requirements, as well as people looking for easier ways to get on the property ladder.

“The Australian property market is flatlining for the first time in years and lending restrictions are tighter than ever before, so savvy Aussies are looking for other ways to get a foothold into the great Australian Dream,” he said.

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However, the survey findings reveal that of the rentvestors surveyed, 65% are under mortgage related stress.

“When we look at data from our study this year, rentvestors are under a greater deal of stress, [more] than the general mortgage holder population, which is just a small indication of the challenges presented by rentvesting,” Thomas said.

If you’re looking to get a foot on the property ladder, but are concerned about stress, you’ll want to start off on the right way, with a low rate home loan. Head over to our home loan comparison tables to compare from a range of great, competitive mortgage rates.

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