‘Silent strain’: More than a million homeowners struggle with mortgage repayments

New research shows more than a million mortgage holders were struggling with repayments before the Reserve Bank of Australia lifted the cash rate yesterday.

One in three homeowners – equivalent to 1,155,000 people – said they struggled to pay their mortgage in January, according to a survey by comparison site Finder released today.

It comes after the the official cash rate was yesterday increased by 25 basis points to 3.85 per cent, the first hike in two years.

Australia’s big four banks have all moved to raise variable interest home loan rates.

To gain any relief from financial stress, the average borrower would need their interest rate to drop to 4.6 per cent, the Finder research found.

It also revealed 12 per cent of borrowers say they have missed at least one mortgage repayment in the past six months.

The rates hike also added to the gloomy outlook of Australians seeking to buy their first home, with 36 per cent believing they’ll never take a first step on the property ladder.

Yesterday’s rate hike will add about $100 to an average mortgage holder’s minimum monthly repayments, although many borrowers have a buffer built up thanks to last year’s three cuts.

Finder home loans expert Richard Whitten says the small rise in interest rates could push thousands of borrowers further into financial stress.

“Many households are already cutting back on spending just to keep up with their home loans – it’s a silent strain on families,” he said.

“And the cost of living has continued to rise. So rising loan repayments only add to the strain.”

“Now is the time to explore your mortgage options before stress turns into a crisis.”

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Source: https://www.9news.com.au/