Some first home buyers 'may be over-committed'

Thursday 26 May 2011

Article by Mozo

First home buyers who purchased a property in 2009 when the federal government grant was increased may have overstretched themselves financially, it has been suggested.

Some first time property buyers 'may have over-committed'

Ric Battellino, deputy governor of the Reserve Bank of Australia, observed that there are already signs that some are struggling with their mortgages, reports the Australian.

"Some of these [first home buyers] may have over-committed themselves financially in order to enter the market, and are now vulnerable to rising interest rates," he stated.

Those who have large repayments to make may want to go online to compare home loans to see if they can transfer to another financial institution that offers better rates.

This advice was recently issued by Lisa Montgomery, chief executive of Resi Home Loans, who told the Sydney Morning Herald that by paying back the same amount as before but on a cheaper deal, Aussies with mortgages can significantly cut the time they have to wait before they fully own their abode.

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