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According to new research released by AMP Bank, 64 per cent of younger Australians and those who purchased a house in the last year when property prices were at a record high are starting to feel the ramifications of rising interest rates.
The research indicated that 74 per cent of Australian home owners aged 44 and under are particularly worried about their finances and making repayments on their mortgages.
Mortgage repayments currently rank as the largest expense for 68 per cent of home owners, according to AMP’s research. Additionally, 58 per cent of Aussie home owners have had to stretch household budgets to make ends meet, with clothing and food being the most common expenses to be cut.
Furthermore, 43 per cent of home owners are considering refinancing their loans in the next year, with obtaining better rates with 78 per cent of home owners citing this as a key motivator. Younger Australians sit well above the national average in regard to considering refinancing, sitting at 57 per cent.
Almost one in five (19 per cent) of respondents considering refinancing said the complexity of the process acted as a major barrier, with a further 13 per cent citing that the time commitment required to refinance was also a barrier.
Other reasons for delaying refinancing included the discernment that the financial benefits would be too small (22 per cent) and the uncertainty around when it would be a good time to refinance given the ever-changing interest rate environment (20 per cent).
Demand for fast approvals and efficient application processes has led to a rise in digital mortgage entrants in the market according to AMP. The bank partnered with Nano to develop a digital mortgage product in May 2022 and announced that the product has been officially launched.
It follows on from many lenders (including, most recently, BOQ) rolling out digital mortgages to speed up approvals and transparency.
AMP Bank group executive Sean O'Malley acknowledged it was a tough time for home owners facing higher interest rates, and that refinancing might help save money and “improve overall financial wellbeing”.
“Australians are increasingly time-poor so understandably refinancing a mortgage is not going to be top of the priority list, but with new digital technology, it’s often a lot easier than what people expect” Mr O'Malley stated.
“Launching a digital mortgage has been a significant step forward to deliver better outcomes for our customers. The digital mortgage, which launched today, makes the refinancing process simpler, and in most cases, a lot faster.”
[RELATED: Nano expands digital loan offering]