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One in eight missed a payment in the past six months and stress levels are rising, survey finds.
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$1,000-a-month average mortgage increase ‘too much for many’
15 February 2023
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Mortgage stress is escalating with 13 per cent of respondents admitting they have missed a mortgage repayment in the past six months, according to the latest survey by comparison site Finder.
Its research showed 7 per cent of mortgage holders had missed one home loan repayment in the past six months and almost as many — 6 per cent — had missed more than one.
That equated to 429,000 mortgagors missing a repayment since July, Finder said.
A small proportion of mortgage holders (2 per cent) had asked their lender for a repayment holiday or have applied for hardship.
Finder home loans expert Richard Whitten said the succession of interest rate increases since last May were starting to bite.
“Nine consecutive rate hikes from the RBA means an Australian with the average loan size of around $600,000 will be paying roughly $1,000 more per month compared to what they were paying in April last year,” he said.
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“Households are really struggling with the monthly outlay and some just can’t keep up.”
The leading cause of missing a repayment was rising interest rates (37 per cent), although one-third said they simply forgot to pay on time.
Among those who missed a repayment in the past six months, one in four admitted they had run short of money after paying other bills. One in seven home owners expected to miss a repayment in the next six months if rates rose further.
Mr Whitten said rates were creeping up too quickly for many mortgage holders.
“With mortgage rates shooting over 5 per cent in 2023, Aussies who had been diligently servicing their monthly repayments are finding it harder to do so,” he said.
“With further rate hikes predicted, things could be about to get worse.”
He said home owners experiencing mortgage stress should attempt to negotiate a more competitive interest rate with their lender.
“If you think your lender can't give you a good enough deal then find something better and switch. Refinancing your home loan takes a few hours’ work but the savings are well worth it,” he said.
“If you know you’re going to miss a payment, talk to your lender first.
“It’s better to negotiate some kind of hardship arrangement or a repayment holiday than to simply stop repaying the loan. This harms your credit score and puts you at risk of a default.”
Finder surveyed 1,054 respondents, 313 of whom had a mortgage.
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