First-time buyers worried about home loan repayments
Nearly a third of first home buyers worry they won’t be able to meet their repayments, in spite of record low interest rates.
The Mortgage Choice First Home Buyer Survey found that 29.2% of first-time buyers say meeting their repayments is their top concern about home ownership. Mortgage Choice chief executive John Flavell said the result came in spite of historically low interest rates.
“It is quite disconcerting to hear so many first home buyers worry about how they will manage their debt. The reality is, interest rates have never been lower, meaning it should be easier than ever for borrowers to manage their debt,” he said.
Flavell expressed concern that first home buyers already worried about meeting repayments could be caught out when rates move upward.
“Most first home buyers would have an incredibly competitive rate – a rate they are unlikely to retain for the duration of their loan. If first home buyers are worried about meeting and managing their mortgage repayments now, how are they going to feel when interest rates start to rise?” Flavell said.
He encouraged first home buyers to use the current low interest rate environment to build up a buffer by making extra home loan repayments.
“First home buyers should actually use the current low interest rate environment as an opportunity to pre-pay their home loan and ultimately drive their debt down as quickly as possible.”