Mortgage stress affecting nearly 40% of recent buyers
Article by Mozo
Australia’s rapidly rising mortgage rates mean that a growing number of recent first-home buyers are suffering with debt stress or could even lose their homes, new research has found.
An exclusive study by financial services firm Fujitsu, which was seen by the Daily Telegraph, shows that mortgage stress is now affecting nearly 40 per cent of the 270,000 people who have entered the property market since June 2008.
Martin North, Fujitsu’s consulting executive director, said that most of the surveyed homeowners had not expected rates to rise as quickly as they have in recent months. Yesterday’s (May 4th) hike by the Reserve Bank (RBA) was the third in three months and the sixth since October.
He added that for 95 per cent of those suffering with mortgage stress, selling was considered the only way out. Others struggling with repayments may choose to compare home loans and refinance under a more affordable mortgage package.
Australia’s major lenders responded to the RBA increase yesterday by raising their own home loan rates. Commonwealth Bank was first to act by lifting its standard variable rate by 25 basis points from 7.11 per cent to 7.36 per cent.
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