Rate hikes could put off first home buyers
New research has found that a third of potential first home buyers would be unlikely to buy if interest rates rise.
A white paper produced by Mortgage Choice and CoreLogic has found first home buyers could be put off by rises in interest rates. The Evolving Australian Dream white paper found 33.7% of prospective buyers said they would be “increasingly unlikely to buy a home” if rates were to rise. While 33.4% said rate rises wouldn’t impact their buying intentions, 32.9% said they were unsure how rate hikes could impact their plans.
“The fact that a rate increase would encourage more than one in three first home buyers to put their property plans on the back burner concerns me,” Mortgage Choice CEO John Flavell said.
“According to our lenders, increased funding pressures have forced them to lift their rates. Looking ahead, I wouldn’t be surprised to see our financial institutions continue to increase their home loan rates out of cycle with the Reserve Bank,” Flavell said.
Flavell urged potential buyers to budget for future “inevitable” rate rises when making their property purchasing plans.
“You should also consider your current and future personal circumstances, as this will impact your ability to repay the mortgage,” he said.