- 30% of respondents admitted that avoiding a default on their home loan is a major consideration
- 38% of respondents only budgeted for a cash rate of 3% or less
- Aussie has provided seven tips to avoid mortgage stress
Home loan and mortgage broker Aussie has conducted new research which has found many Australian mortgage households are hurtling towards mortgage anxiety.
30% of respondents admitted that avoiding a default on their home loan is a major consideration.
75% said they are unsure how the cash rate increases will impact their household budget, which has resulted in them searching for clarity.
Almost three in ten mortgage holders (28%) did not believe the cash rate would increase when budgeting for their home loan, with another four in ten (38%) only budgeting for a cash rate of 3% or less.
“With increased cost of living pressures, there’s no doubt this is a stressful time for many Australians, particularly mortgage holders,” said Karen Sorrenti, State Broking Manager at Aussie.
“Our latest research shows almost one in five Australians (18%) with mortgages are dealing with ‘significant mortgage stress’, and a further four in five (81%) confirmed the rising cash rate and upward cost of living is a growing reality, placing unwanted tension on their household.
“However, a staggering number of mortgage holders have not taken action or investigated their alternative options which is one key factor in addressing the mental and emotional strain.”
Vital to set boundaries and manage financial wellbeing, expert says
While borrowers are encouraged to look at refinance options, Jane Monica-Jones, a leading financial therapist and author on the subject, said there are many more ways to manage household financial stresses.
“I’d encourage anyone concerned with mortgage related stress to work on their financial literacy, reach out to experts to learn more about what options are available to support their individual circumstances and be proactive to improve their financial well being and resiliency,” said Ms Monica-Jones.
“Over recent years, more Australians have understood the role that mortgage brokers play in helping navigate the home finance market, enabling them to secure finance that best suits their individual needs.”
In light of this, Aussie has provided seven savvy ways for a household to avoid mortgage stress.
Seven ways to avoid mortgage stress
- Stop, look and ask. Always know your current rate. If it’s fixed, ensure you know when it ends.
- If you’ve avoided financial literacy, now is the time to learn. It’s the gateway to managing or ideally avoiding mortgage stress.
- Do some calculations; be a step ahead on what you can afford for repayments.
- Practice a mindful money approach, paying attention to your overall financial position.
- Refinance to a home loan with low or zero fees.
- Take advantage of cashback refinance offers.
- Consider an offset account, which reduces the amount you pay in interest.
