Home loan stress forces couple to sell up

Thursday 02 December 2010

Article by Mozo

A South Australian couple have explained how escalating mortgage problems forced them to sell their home in an attempt to clear debts.

Home loan stress forces couple to sell up

Sally and Martin Ojasoo recently sold their home at Evanston, north of Adelaide after finding the $1,300 monthly repayments on their home loan unmanageable.

Speaking to the Australian, they revealed that their five-year, 8.25 per cent fixed-rate mortgage, which was taken out in mid-2008 just prior to interest rates falling to record low levels in the wake of the global crash, had pushed their family budget to breaking point.

"I made a bad decision fixing a loan I couldn't afford,'' Mrs Ojasoo said.

"Then everything was pointing to even higher variable loan rates when our fixed term was due to end in a couple of years.''

The Ojasoos revealed that after selling up, which incurred a $10,000 Westpac fee for breaking the fixed-term contract, they now plan to live mortgage-free in a kit home near Wallaroo, on South Australia's Yorke Peninsula, after paying $20,000 for a block.

Aussies struggling with rising repayment bills could choose to compare home loans and consider refinancing. Last month, all of the big four banks lifted their variable home loan rates by more than the Reserve Bank's official 0.25 per cent hike.

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