Mortgage stress? - Option Home Loans

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Option Home Loans - Mortgage stress

Are you struggling with your mortgages? If you’re spending more than 30% of your pre-tax income on home loan repayments, it’s likely you’re feeling it.

News.com.au published an article of areas where Aussies struggle to cope with home loans. The article pointed to the growing number of Australians who are at risk of being crushed beneath the rate of their mortgages, and now the areas most at risk have been pinpointed. It’s not surprising that the top five postcodes in the country’s three largest cities that are experiencing the highest rates of mortgage stress. Mortgage stress refers to households spending more than 30 percent of their pre-tax income on serving home loans, which the Australians Bureau of Statistics considers to be a financially precarious position.

“A huge number of Australians are at risk of collapsing under the weight of their mortgages, and now the spots most at risk have been pinpointed.” (news.com.au)

As the cost of living in Australia continues to rise, more people are finding themselves suffering from mortgage stress. Mortgage stress can hit you when your monthly repayments are so high that you struggle to pay the bills. Reasons behind might be taking a higher commitment or live event such as divorce, the forces of nature move against it and interest rates go up, or losing a job or fall ill or a short-term or permanent disability that prevents from working. Reasons behind this is that it might be taking a higher commitment or live event such as divorce, the forces of nature move against it and interest rates go up, loss of employment, illness, or a short-term or permanent disability that prevents you from working. The reason might also be as simple that even if you have the income to make payments, you aren’t able to manage the household budget.

“International ratings agency Moody’s recently revealed Australian’s mortgage delinquency rate was at its highest level in at least five years, with 1.58 percent of people at least 30 days behind on their mortgage repayments late last year. In NSW the delinquency rate is also at its highest level in five years, although the state’s delinquency rate is still lower than anywhere else except the ACT.” (abc.net.au)

“Moody’s expects the mortgage delinquency rate to keep rising this year because of high debt levels, low wage growth and the conversion of many interest-only loans to principal and interest this year and next.” (abc.net.au)

Realestate.com.au published tips how to avoid mortgage stress:

1. Use a budget tool
2. Save regularly
3. Make additional repayments when you can

What to do when you are having the mortgage stress?

1. Talk to your lender
2. Consider using an offset account
3. Temporarily switch to an interest-only loan
4. Cut out unnecessary expenditure

Don’t feel anxious, pressured or frustrated each time a bill arrives. Did you know that you can get free help from lending specialist by using a loan broker? Find out your possibilities of refinancing – and save your money.

Benefits of using a loan broker when refinancing;

• Only one application
• Compare more than 35 home loan lenders
• Get free expert advice
• Get better rates
• Save time and money
• Less paperwork for you
• Guided help to apply for the First Home Owner Grant or other government incentives
• Easy and convenient
• You’ll have expert’s advice and support at every step

How it works?

At Option Home Loans, we will meet you at a time and place that suits you. As soon as you contact us or book an appointment, one of our lending specialists will be into touch.

Make your life changing decision and contact us today!
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References:
https://www.news.com.au/finance/economy/interest-rates/mortgage-stress-hot-spots-revealed-areas-where-aussies-struggle-to-cope-with-home-loans/news-story/e91de9b0b0312aa44afb92a7ee7509a9

https://www.abc.net.au/news/2019-04-05/researchers-warn-of-rising-mortgage-stress/10972682

https://www.realestate.com.au/advice/mortgage-stress-what-is-it-how-can-we-avoid-it/