A Fox Symes Debt Solutions survey has revealed that around 47% of Aussie home owners are worried about meeting their ongoing home loan repayments. The survey, which was conducted by Galaxy Research in August 2016 has found that out of the 1,014 home owners that were surveyed nearly half of them were concerned about paying off their mortgages altogether.
The survey also revealed that 20 per cent of people were worried that they will never be able to pay off their home loan at all, 20 per cent were worried about how they would manage their home loan when interest rates begin to rise again and 18 per cent thought their home loan repayments were too high.
The survey states that a main cause of this is due to “Australia’s skyrocketing housing costs which are causing wide-spread grief with almost half of all Australians with home loans currently worried about meeting their home loan repayments.”
At the moment interest rates are at historically low levels but people's home loans and general living costs are at historically high levels and there doesn't seem to be any relief coming anytime soon.
Any future rise in interest rates, which will inevitably happen at some point, will really squeeze a lot of Australian's finances even more so. And to add insult to injury, even when the Reserve Bank drops interest rates most banks won't pass on the full rate cut to home loan customers which makes matters even worse.
When interest rates begin to rise again this means home owners will have to find hundreds of extra dollars every year to pay for rising mortgage interest rates.
Housing affordability in Australia is putting a huge strain on a large number of Australians wanting to buy their first home and when you think about it, how long would it take a couple earning a combined salary of $150,000 to pay off a $900,000 home loan at 5% p.a.? The interest cost along would almost be a third of thier NET income, then you have general living expenses plus other debts such as credit cards, car loans and personal loans.
If you have a home loan then NOW is the time more than ever to stick to a budget and pay as much as you can off your home loan and take advantage of these historically low interest rates. Set a realistic budget, cut back on unnecessary expenses and don't get into any debt unless it's going to add value to your financial situation.
If you were to get a $30,000 car loan over 5 years what do you have at the end of it? An asset that's dropped more than half it's value and you have paid tens-of-thousands of dollars for it in interest, loan repayments and ongoing running costs. Wouldn't a $10,000 car do the same thing as a $30,000 new car?
For an obligation free financial health check of your home loan and financial circumstances please contact us and a qualified home loan specialist will be in touch..