Homeowners who purchased during the pandemic are being hit from all directions as mortgage payments rise, property values fall and everyday expenses skyrocket. 7NEWS
A borrower with a $500,000 housing debt has already seen their monthly repayments rise by around $366 a month since rates began to rise in April.
Arrears rates for mortgages have already begun to trend upwards, according to Equifax executive general manager, Moses Samaha.Samaha says first-time buyers are more than twice as likely than other mortgage holders to be more than 90 days late in their mortgage repayments. “As a result, this cohort has rapidly felt the impact of rate rises on their comparatively larger mortgages, when compared with households that have had a longer time to pay down their debt and build equity.”But Zippy Financial Group director and principal broker, Louisa Sanghera, says homeowners should think twice before rushing to switch to a fixed interest rate to escape rising variable rates.
“Borrowers should consider whether locking in these significantly higher rates is likely to benefit them in the long term, because no one knows when the current rising interest rate cycle will end,” she said.
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