A report from Fitch Ratings indicated that low retail petrol prices for two years have given Australian households the opportunity to reduce living expenses, boost savings, and cope better with mortgage obligations.
According to the report from Fitch’s Asia-Pacific Structured Finance Chart of the Month series, Australian households spent an average of A$2,604 between May 2015 and May 2016 on unleaded petrol. This is lower than the May 2014 to May 2015 figures by A$260, and A$540 lower than in May 2013 to May 2014. The figures are based on the average fuel consumption of 40 litres per week and average national retail unleaded petrol price from the Australian Institute of Petroleum.
This reduction in expenses could have contributed to the strong mortgage performance in the Australian market, along with lower mortgage rates and buoyant house prices.
However, Fitch also noted that petrol prices have a higher degree of volatility compared to mortgage rates. This might give households an expense shock once petrol prices rise, especially if they had not been able to translate their lower petrol expenses to savings.
With interest rates at their lowest for more than 50 years, there are some great rates available. The best thing to do is to compare rates from all the lenders. Let us help take the leg work out of doing this - Compare Home Loans now