Powered by MOMENTUM MEDIA
subscribe to our newsletter
Rate rises would make 34% of FHBs less likely to buy

Rate rises would make 34% of FHBs less likely to buy

More than a third of potential first home buyers believe they may need to delay buying a property should interest rates start rising, according to new research.

According to Mortgage Choice and Core Data’s Evolving Great Australian Dream white paper, 33.7 per cent of prospective buyers said they would be “increasingly unlikely to buy a home” if rates were to increase.

However, a similar proportion (33.4 per cent) of those surveyed said rate rises would not impact their property buying plans, with 32.9 per admitting they were uncertain as to how rate fluctuations would affect their intentions.

Advertisement
Advertisement

Mortgage Choice CEO John Flavell was concerned that one in three first home buyers expected to potentially have to shelve their acquisition plans, especially as "the fact is, rate rises are inevitable”.

Noting that the majority of lenders have increased the interest rates across their suite of home loan products, Mr Flavell said: “These rate increases have come outside of any rate adjustments by the Reserve Bank of Australia.”

According to the CEO, Mortgage Choice’s lenders had flagged that increased funding pressures had forced them to crank up their rates.

“Looking ahead, I wouldn’t be surprised to see our financial institutions continue to increase their home loan rates out of cycle with the Reserve Bank,” he predicted.

However, Mr Flavell said that just because rates were rising and would continue to do so in the near-term, first home buyers shouldn’t be put off.

“The reality is, even with the latest rate increases, mortgage interest rates are still sitting at historically low levels, which ensures the cost of borrowing is still incredibly affordable,” he argued.

But, Mr Flavell highlighted the importance of ensuring that any mortgages taken out could still be paid off when "inevitably" interest rates rise.

[Related: A quarter of Australians worry about money daily]

Rate rises would make 34% of FHBs less likely to buy
mortgagebusiness
  • 23
    Days
  • :
  • 07
    Hours
  • :
  • 54
    Minutes
  • :
  • 01
    Seconds

EARLY BIRD CLOSING SOON
Have you secured yours?

Latest News

Stagnant housing market activity is expected to prolong the stay of borrowers in arrears, with the forecast fall in home values to be among...

The non-bank sector is expected to “lead the way” in 2019, after issuing more than 60 per cent of new home loans in 2018, according to S...

The volume and value of new residential buildings fell in the September quarter 2018, reflecting the “softening” housing market the HIA ...

FROM THE WEB
podcast

LATEST PODCAST: How a softening property market will impact the mortgage sector

Is enough being done to ensure responsible lending?