Poll: Changing mortgage rates would put 5% of borrowers in financial difficulty | Illawarra Mercury

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One in 20 Australians would face financial hardship if hit by an unexpected hike in mortgage rates, a new survey says, although regional mortgage lenders may be in a better position than their counterparts in the city. The result was contained in new data compiled by the Finder comparison website. The nationally representative survey of 597 home loan clients found that one in 20, or 5%, would need financial help if their mortgage rate increased off-cycle, a term used for describe when lenders raise rates when the Reserve Bank of Australia does not. Survey results suggest homeowners in metropolitan areas are more sensitive to mortgage rate changes, with 5 percent of city respondents indicating they would face financial hardship with a rate change compared to 4 percent in regional regions. Regional respondents were less likely to take action if faced with a rate hike, such as contacting their lender for a better rate or changing lenders, with 26% saying they would do nothing compared to 16% of respondents from the city. Sarah Megginson, Finder’s mortgage editor, said the pandemic had left many Australians “vulnerable to debt.” “Over the past 18 months, so many Australians have seen their financial reserves run out,” she said. “There is a real chance that a new economic shock could lead to more people falling behind on their mortgage payments.” What if you are having trouble making your mortgage payments? Union financial adviser Rob Benton, who works for the National Debt Helpline service, said the consistently low rates, which are expected to last for some time, meant that an off-cycle rate hike was less likely to push mortgage holders in financial stress than other factors. . “When it comes to the rising interest rate cycle, we haven’t seen that [rises] for quite a long time – we’ve seen years of downward pressure, ”said Mr Benton, who works primarily with people based in New South Wales. National Debt Helpline, with many callers already experiencing mortgage stress, sometimes because they have yet to recover from the 2020 foreclosure. “In the current environment, we have seen an increase in the number of people experiencing mortgage stress. mortgage stress, ”he said. seeing a little bit of pressure we had people who went through the six months last year and now they are going through it again, ”he said. Anyone having difficulty repaying their mortgage should contact their credit institution directly or call the National Debt Helpline. “Ultimately, it is much better for a borrower to contact their lender if they have a problem with their repayments, as it is possible to reduce the payment or change the repayment or have a payment break or d ‘incorporate at the end of the mortgage,’ he advised. contact the bank as soon as possible, “he added.

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