The rising cost of living is making it harder for potential home buyers to save a deposit and reducing how much some can borrow to spend on their next property | heagney_melissa
The cost of living is on the rise, making it harder to save money for a home deposit.Banks are starting to look more closely at home borrowers’ expenses, mindful of higher bills and grocery prices.The rising cost of living is making it harder for potential home buyers to save a deposit and reducing how much some can borrow to spend on their next property.
To stabilise inflation, the Reserve Bank has been lifting interest rates fast, making mortgage repayments more expensive to discourage consumer spending. Higher interest rates also reduce borrowing capacity. The banks were also monitoring expenses more closely, Landahl said, although there had been no formal policy changes, and he did not think one was needed given that buffers were already in place.
More expensive rent, food, petrol and energy bills meant people could not save as much towards a deposit.“It’s hurting people’s ability to save as much as they used to,” Unkles said. Mortgage Choice Elsternwick broker Christopher Ladley said the banks were looking closely at people’s ongoing living expenses.“The bank will still have an understanding of what your living expenses should be and that has been lifting in line with the extra cost of strawberries and lettuce,” he said.
That can cause a delay in the time it takes for people to get a loan while they wait to adjust expenses.
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