WA borrowers struggle with rising living costs

Friday 28 January 2011

Article by Mozo

A local mortgage broker in Western Australia has pointed to rising living costs and irresponsible lending practices as reasons for the high mortgage default rate in one of its towns.

WA borrowers struggle with rising living costs

Justin Smith, who is also president of the Rockingham Kwinana Chamber of Commerce, told the Weekend Courier that higher electricity and water bills, as well as rising interest rates, were affecting many residents with a home loan.

He was speaking after figures from ratings agency Fitch showed that 2.63 per cent of homeowners in postcode 6167, which includes all suburbs in the Town of Kwinana except Leda and Wellard, were more than 30 days in arrears on their mortgages in the figures to September 30th.

The result means that the area has the highest rate of overdue home loan repayments in WA and the fourth highest in Australia.

Mr Smith told the Weekend Courier that people looking to compare home loans had been tempted with cheap offers before being hit with high costs later on.

"In this area in particular we want everything now and a lot of people have got lots of things on interest-free loans then get hit with 20 or 30 per cent rates and begin to struggle," he said.

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