Aussies are expecting home loan rate rise woes
The spectre of rate rises is weighing on the minds of Australian households.
The ME Household Financial Comfort Report has found a high level of pessimism surrounding the future of home loan interest rates. 31% of the households surveyed expect to be worse off should the Reserve Bank of Australia (RBA) raise the official cash rate by 1%. Of households with a mortgage, 47% said a 1% rate rise would leave them worse off.
The report found that households with a mortgage were devoting more than a third of their post-tax income to mortgage repayments, with 15% paying more than half.
“Speculation that the RBA will lift the cash rate is causing households concern, as it will impact monthly cash flows and the ability to pay off debts, save and spend," ME consulting economist and report co-author Jeff Oughton said. "Gen Xers (41%), single parents (36%) and, to a lesser degree, couples with young children (35%) expressed the most concern about potential rate rises.”Oughton said that interest rates would remain an important factor in household financial comfort, with the RBA tipping 3.5% as a neutral cash rate.
Should rates rise, 53% of owner-occupiers expect to be worse off, while 35% of investors say that they would be worse off.
- How much will a reverse mortgage cost you?
- Planning your retirement? Here are 4 things you need to know about reverse mortgages
- Home buyers with low deposits can save thousands in LMI premiums with these lenders
- How will proposed “simpler credit” rules affect Australian borrowers?
- Borrowers are back: homebuyer lending rises 10% in July