Thousands of homeowners 'really struggling' to make mortgage repayments after rate rises
Homeowners are "really struggling" to make their mortgage repayments, with rate rises meaning many are being forced to cough up an extra $1000 each month.
More than one in eight homeowners have missed a monthly mortgage repayment in the past six months, according to a new Finder survey, which was carried out before the latest rate hike last week.
A significant 13 per cent of the 313 people surveyed with a mortgage said they had missed a repayment since July.
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The RBA has hiked interest rates for nine consecutive meetings after earlier alluding that rates would not increase until 2024. AAP
Six per cent said they had missed more than one repayment, while more than one in four said they were worried they would miss a repayment in future.
Finder home loans expert Richard Whitten said the level of mortgage stress in Australia was worrying.
“Nine consecutive rate hikes from the RBA means an Australian with the average loan size of around $600k will be paying roughly $1000 more per month compared to what they were paying in April last year," he said.
“Households are really struggling with the monthly outlay and some just can’t keep up.”
READ MORE: More interest rate rises likely in coming months: RBA
RBA Governor Dr Philip Lowe is under increasing pressure as interest rates increase. The Sydney Morning Herald
One in seven survey participants said they thought they will miss a repayment in the next six months if costs rise any further.
Whitten said for many Australians mortgage rates were creeping up too quickly.
“With mortgage rates shooting over five per cent in 2023, Aussies who had been diligently servicing their monthly repayments are finding it harder to do so.
“With further rate hikes predicted – things could be about to get worse.”
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Whitten has urged homeowners to try to get better rates for their loans and communicate with their banks.
“Try to negotiate a more competitive interest rate with your current lender," he said.
“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.
"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."
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