australians-mortgage-worries.jpg

While Australian borrowers are still worried about the potential rate hikes, they are now making steps to protect themselves from further dent in their financial wellbeing.

According to AMP Bank, here are some of the actions being taken by Australian borrowers to cushion the financial impact of rate hikes:

  • Around 83% have built a savings buffer and have access to savings to cover an extra month’s worth of mortgage payment.
  • Roughly 71% have made changes to their household budgets, spending less on groceries, entertainment, clothing, holidays, and gifts.
  • For people with children and those under 44 years old, 79% have adjusted their household budgets.
  • Approximately 54% found ways to supplement their cashflow and income to increase their savings buffers.
  • Of those who have taken action, 74% said it helped improve their overall sense of financial wellbeing.

AMP Bank group executive Sean O’Malley said mortgage holders are finding more creative ways to improve their household budgets in period of higher costs of living.

“Steps like reviewing cashflow, setting a budget and regularly shopping around for a more competitive interest rate offer are practical ways to help reduce financial stress,” he said.

“Many Australian homeowners will find themselves in a higher interest rate environment as they roll-off fixed home loans in the months ahead.”

Buying a home or looking to refinance? The table below features home loans with some of the lowest interest rates on the market for owner occupiers.

Update resultsUpdate
LenderHome LoanInterest Rate Comparison Rate* Monthly Repayment Repayment type Rate Type Offset Redraw Ongoing Fees Upfront Fees LVR Lump Sum Repayment Additional Repayments Split Loan Option TagsFeaturesLinkCompare
6.04% p.a.
6.06% p.a.
$2,408
Principal & Interest
Variable
$0
$530
70%
Featured Online ExclusiveUp to $4k cashback
  • Immediate cashback upon settlement
  • $2000 for loans up to $700,000
  • $4000 for loans over $700,000
5.99% p.a.
5.90% p.a.
$2,396
Principal & Interest
Variable
$0
$0
80%
  • A low-rate variable home loan from a 100% online lender. Backed by the Commonwealth Bank.
6.14% p.a.
6.16% p.a.
$2,434
Principal & Interest
Variable
$0
$250
60%
  • Find out your loan eligibility in 2 minutes or less
  • Complete your application in less than 20 minutes
  • Low fees and fast approval times
5.95% p.a.
5.95% p.a.
$2,385
Principal & Interest
Variable
$0
$0
90%
5.94% p.a.
5.95% p.a.
$2,383
Principal & Interest
Variable
$0
$0
90%
Important Information and Comparison Rate Warning

Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to be made on variables as selected and input by the user. Some products will be marked as promoted, featured or sponsored and may appear prominently in the tables regardless of their attributes. All products will list the LVR with the product and rate which are clearly published on the product provider’s website. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of .

Despite borrowers already making changes, the study found that around 69% are still worried about meeting their mortgage repayments if interest rates continue to rise.

Meanwhile, only 45% of borrowers are confident that their current rate was competitive.

Mr O’Malley said it would be helpful for borrowers to take extra steps to manage their financial wellbeing.

“If not already, it’s a good idea to talk to your bank or broker to understand your options and get resources and help tailored to your circumstances,” he said.

For Mr O’Malley, it is crucial for borrowers to determine where they are currently standing in terms of both spending and income.

“Then take advantage of one of the many budget/tracking apps that provide a clear view of your spending patterns,” he said.

If borrowers feel like their current loan terms are not as competitive as those currently existing in the market, Mr O’Malley said assistance from experts would be able to help what loan options would best suit them.

“There’s plenty of research showing that people who draw on expert advice are less financially stressed and make better decisions,” he said.

Photo by Karolina Grabowska from Pexels.

Collections: