Mortgage stress forces the rich to rent appliances

Tuesday 25 May 2010

Article by Mozo

Australia’s rising interest rates are forcing more families on an annual income of $100,000 to rent home appliances as they struggle to keep up with mortgage repayments.

Announcing a full-year net profit of $16.4 million, rental company Thorn Group said it has seen an increase in the number of higher-income customers who are renting equipment because they do not have the spare cash to pay for a new fridge or washing machine.

"We are talking about home owners with a $300,000 mortgage who are paying $300 more in monthly repayments now than a year ago," said managing director John Hughes.

The Reserve Bank has enforced six interest rate hikes since October last year – a move which has prompted a growing number of Aussies to compare home loans as debt problems mount up.

Thorn also announced that its Cashfirst business, which offers high-interest, emergency loans to hard-up customers, also performed well last year as it doubled the number of customers on its loan book to 4,000 from 2,000 last year.

Meanwhile, it was reported this week that ING Direct, Australia’s fifth largest lender, is preparing to offer interest-only mortgages as a solution to the country’s housing affordability problems.

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