A new survey has revealed that at least 20% of New South Wales mortgage holders are worried about the prospect of increasing mortgage rates.

The survey, conducted by Galaxy Research for debt solutions provider Fox Symes, show that even with the interest rates at a record low of 1.5%, half of NSW mortgage holders doubt their ability to make their home loan repayments.

“People are struggling with mortgage repayments, which is compounded by wage stagnation and rising every day for things like food and utilities," said Deborah Southon, director of Fox Symes.

The repayment on an average loan in June 2010 was at $2,402.56 a month at an official cash rate of 4.5%. Today, repayments on an average loan are at $2,395.49, even with a lower cash rate, owing to a higher average loan size.

In the case of a 30-year $400,000 loan, principal and interest repayments will be at least, $2,245 a month, at the average standard variable rate of 5.4%.

With a 1% increase on the rates, mortgage holders will have to pay $260 more in interest every month.

“When working out whether you can afford to take on new debt, base your loan repayments on a rate of 7% (the longer-term interest rate average) ans that provides a reasonable buffer for rate hikes,” suggested Pass Go Home Loans managing director Jamie Moore.