Powered by MOMENTUM MEDIA
subscribe to our newsletter

1 in 3 ‘likely to struggle’ with mortgage payments

A third of Australian borrowers believe that they might struggle to meet mortgage repayments if interest rates rose, according to new research.

A survey of 1,008 Australians conducted by Roy Morgan on behalf of the Salvation Army has found that one in three respondents were “likely to struggle” to pay off their home loan if interest rates rose.

Additionally, the research revealed that almost half of Australians believe that owning a home is no longer possible, amid growing concerns over housing affordability. 

The research follows an analysis of data from Digital Finance Analytics (DFA) which suggested that 51,500 borrowers could be at risk of defaulting on their mortgage in the next 12 months.

DFA principal Martin North attributed the rising risks of mortgage defaults to slow wage growth, cost of living pressures and growing size of mortgages.

Advertisement
Advertisement

Salvation Army officer Major Paul Moulds added that Australians are living under “extreme housing stress” and lack financial stability, with over a quarter of respondents (26 per cent) concerned that they “won’t have enough reasonably paid work” or a “job at all” this year, and 46 per cent worried about their financial situation.

“Two-thirds of people accessing our emergency relief services are living under extreme housing stress,” Major Moulds said.

“With more than half of their income going towards housing, many Australians simply can’t afford to save money.

“A lack of job security is also complicating people’s financial stability, pushing them further to the margins.”

Major Moulds encouraged Australians to take “preventative steps” to avoid financial stress, with 41 per cent of respondents also noting that their financial situation is affecting their “emotional wellbeing”, “family life”, “career goals” or “social life”.

PROMOTED CONTENT


“We need to remove the stigma around asking for help,” Major Moulds added. “We are urging people to take preventative steps to avoid hardship in the future. It’s clear that many Australians are not having an honest conversation about their situation and are waiting till they are in crisis before taking action.” 

[Related: Fresh warnings issued over mortgage stress]

 

1 in 3 ‘likely to struggle’ with mortgage payments
mortgagebusiness

Are you a new-to-industry broker in the process of growing your business? Then there’s some great news: The Adviser’s New Broker Academy is back in 2021 and will provide you with essential insights into cutting-edge tools, strategies and processes to fast-track to success. Don’t miss your chance to attend. To secure your FREE place, visit newbroker.com.au now!

Charbel Kadib

Charbel Kadib is the news editor on the mortgages titles at Momentum Media.

Before joining the team in 2017, Charbel completed internships with public relations agency Fifty Acres, and the Department of Communications and the Arts.

You can email Charbel on: This email address is being protected from spambots. You need JavaScript enabled to view it.

Latest News

The chief of Australia’s largest bank has said lenders should act pre-emptively and shift their floor rates for mortgage serviceability am...

Total household wealth reached a high of $13.4 trillion in the June quarter, primarily due to rising property prices, according to the Aust...

The property exchange settlement platform has been granted approval to establish an Electronic Lodgement Network in the ACT.  ...

Join Australia's most informed brokers

Do you know which lenders are providing brokers and their customers with the best service?

Use this monthly data to make informed decisions about which lenders to use. Simply contribute to the survey and we'll send you the results directly to your inbox - completely free!

How long do you think it should take to discharge a mortgage?

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.