Home News Mortgage Choice: Australians still able to repay mortgages

Mortgage Choice: Australians still able to repay mortgages

Font size :
House prices have continued to rise in recent years amid record low interest rates, but this is not impinging on borrowers' ability to keep up with their payments, says Mortgage Choice CEO John Flavell.

"As the cash rate has come down, our customers have maintained their repayments and amortized their debts at an accelerated rate," he said. "The arrears rate on the portfolio was also diminishing in line with that."

In fact, Flavell noted that low interest rates could be stimulating pre-payments despite the continued rise in Australian prices. "The proportion of our customers that are in advance by one month or more on their mortgage has grown in recent times from 24 per cent to over 27 per cent. Typically, they're in advance by nine months or so," he said.

According to the latest CoreLogic data, the home price index for Australia's capital cities rose 0.8 per cent in July from June. The latest data from the Demographia International Housing Affordability Survey also shows that the median housing price in Sydney was 12.2 times more than the median annual household income in the third quarter of 2015. However, data from Standard & Poor's in mid-July showed that the number of mortgages in arrears rose in May for the seventh straight month.

Flavell expects the Reserve Bank to further cut rates to a new record low of 1.5 per cent.

"The expectation is the RBA is more likely to cut than not," he said. "We've got a stubbornly high Australian dollar against a backdrop of easing across the globe and you would think then that the RBA would be rather pretty keen to address that."

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

Mortgage News and Articles

New social housing aims to transform Ivanhoe Estate New social housing aims to transform Ivanhoe Estate

The sprawling redevelopment aims to boost the supply of affordable housing in Sydney Read more

A new suburb will be built in west Melbourne A new suburb will be built in west Melbourne Mount Atkinson will become home to more than 22,000 people over the next 15 years ... Read more

Surging house prices threaten liveability in Melbourne Surging house prices threaten liveability in Melbourne Analysts warn the city could become just as unaffordable as Sydney, if property trends continue ... Read more

More Aussies would benefit from regional hubs linked to cities More Aussies would benefit from regional hubs linked to cities Shorter commutes could spur higher home sales in regional towns, analysts say ... Read more

More mortgage news and articles

Sponsored Links

Friday, Aug 18, 2017
Top Featured Rates
Top Bank Rates

Get help choosing the right home loan

Let us help you find the right home loan for your needs.

Tell us a bit about your circumstances:
  • Purpose of mortgage
  • Household Income
    $
  • How much do you want to borrow?
    $
  • How much deposit do you have?
    $
  • How much is your house worth?
    $
  • How much do you still owe on your mortgage?
    $
  • What type of mortgage do you have?


  • How much is your new home?
    $
  • How much do you want to borrow?
    $
  • How soon do you want a mortgage?
Next
  • First name
  • Last name
  • Where do you live?
  • Phone number

Special Offers

Related Keywords