The sacrifices Australians are making to meet home loan repayments

June 17, 2024

New data has revealed that four out of five borrowers have had to tighten their budgets to keep up with home loan repayments as a result of high interest rates.

 

In the latest Mortgage Choice Home Loan Report, more than half of customers questioned said they were eating out less frequently and had also cut back on entertainment expenses, such as going to the cinema or concerts.

Interest rates have risen 13 times since May 2022, significantly increasing home loan repayments and stretching homeowners’ budgets.

 

As a result, homeowners have seen their mortgage repayments increase by hundreds or even thousands of dollars each month.

Borrowers have found various ways to cut back on spending to meet their home loan obligations, including delaying or cancelling holidays and cancelling subscription services.

Some are finding it tougher than others, with almost one in five taking on extra work or side jobs to make additional money.

Sacrifices made by borrowers

Picture1 Copy

 

It’s not just discretionary spending that borrowers have cut back on. One in five borrowers have dipped into their savings to make ends meet.

However, not everyone has funds set aside for emergencies, leaving 7% of borrowers asking family for financial assistance.

Despite many homeowners still struggling, the latest data shows that refinancing activity has slowed by almost 26% compared to the March quarter of last year.

This slowdown is due to the peak of inflation passing, the stability of the cash rate, and the fact that most homeowners who were looking to refinance have already done so.

Changes in loan purpose over March 2024 quarter

2

 

There are also signs of optimism from potential buyers who are increasingly confident that now is a good time to buy.

More than half of potential buyers had postponed their purchasing plans until 2024, but 70% now feel positive about buying, up from just 59% in May 2023.

This optimism is reflected in the latest Mortgage Choice home loan application data, which shows the value of purchase submissions increased by 17.5% compared to the previous March quarter.

With rising property prices, the average loan size has increased by 9% nationally.

Borrowers will continue to see their finances stretched until interest rates begin to decrease, although there are differing opinions on when the first rate cut will occur.

Nevertheless, with rising confidence that now is a good time to buy, potential buyers view the current market conditions as favourable or likely to improve soon.

As a result, we could see an increase in demand over the remainder of the year, particularly leading up to the spring selling season.

 

 

Source: realestate.com.au

 

You might be also interested in

Capi Ca9eb55150deef6ab89d0c754fe75e96 286afd6f86c9ad73014c3dcce08d066a
International governments, super funds and global business giants cashing in on Aussie home building boom revealed
International property giants and super funds are splashing huge sums buying into Aussie builders and developments as they look to cash in on the nation’s housing crisis. While the investments
VIEW POST
41 Battle Boulevard Seaforth 1
‘Wouldn’t hesitate’: What’s behind the biggest pre-spring city real estate rush in over a decade
Homebuyers will have plenty of fresh properties to inspect this spring, as new listings in Australia’s capital cities reached their highest levels for August in more than a decade.   Capital
VIEW POST
45fdd9c6f3351cdc015447975ce17892
The surprising change facing new units in Australia
Typically, units cost less than houses and can provide a more affordable entry point into property ownership compared to houses for many homebuyers. Ten years ago, the median price of a
VIEW POST
Gettyimages 2007503834
How many Victorian investors have sold due to higher land taxes?
Changes to land tax thresholds in 2024 increased costs significantly for investors in Victoria, but how many of them have responded by selling their rental properties? Analysis comparing the number
VIEW POST
111 1600x1080
Neighbourhood Guide – Footscray
Melbourne is home to several neighbourhoods with impressive transformations, and Footscray is one of the most remarkable examples. Once known as a working-class area with a rough reputation, it has
VIEW POST
Undefined 300x158 1600x1080
Investors borrowing rises 35.4%
Property investors committed to $11.71 billion of home loans in July 2024, which was the second-highest month on record, according to the Australian Bureau of Statistics. It was also 35.4%
VIEW POST
845ddd5655ce6af21d5deeee1b9a3c97 1600x1080
Growth cools in Australian housing values through winter as Melbourne median slips below Perth and Adelaide
National home values increased 0.5% in the month of August, the 19th consecutive month of increase in home values. However, the pace of growth is showing clear signs of slowing. National home
VIEW POST
381d7b785e5423faaa910103e75208b4 1600x1080
The end of the rental boom is in sight
Rents flatlined in July and August as rental demand weakens amid slowing migration and affordability constraints forcing a change to household formation. After rocketing 39% higher between August 2020 and
VIEW POST
Capi 1d1ab9647669ddc418a06c531ce53e0a 436c1a60ecedfc0d046c3f134ad93dcb
US cuts interest rates: Will Australia be next?
The US Federal Reserve has voted to lower interest rates by 0.05 percentage points in a sign that the global war on inflation is finally coming to an end. And
VIEW POST
Gettyimages 2030994565
Rising buyer concerns: Is now a good time to buy property?
New data has revealed there are more buyers concerned that now is not a good time to purchase a property compared to last year. In the most recent Residential Audience
VIEW POST

Get your Free Property Guide.

Here goes your text ... Select any part of your text to access the formatting toolbar.

Get your free Sales Report for The sacrifices Australians are making to meet home loan repayments

Get your free Sales Report for The sacrifices Australians are making to meet home loan repayments

Subscribe to hear the latest

Start The Conversation Today.

Call us on:

1300 850 730

Request a Callback:

Send us a Message:

Privacy Policy

Get your Free Property Guide

Get your free Suburb Report for The sacrifices Australians are making to meet home loan repayments

Privacy Policy

Who we are

Suggested text: Our website address is: https://motionproperty.com.au.

Comments

Suggested text: When visitors leave comments on the site we collect the data shown in the comments form, and also the visitor’s IP address and browser user agent string to help spam detection.

An anonymized string created from your email address (also called a hash) may be provided to the Gravatar service to see if you are using it. The Gravatar service privacy policy is available here: https://automattic.com/privacy/. After approval of your comment, your profile picture is visible to the public in the context of your comment.

Media

Suggested text: If you upload images to the website, you should avoid uploading images with embedded location data (EXIF GPS) included. Visitors to the website can download and extract any location data from images on the website.

Cookies

Suggested text: If you leave a comment on our site you may opt-in to saving your name, email address and website in cookies. These are for your convenience so that you do not have to fill in your details again when you leave another comment. These cookies will last for one year.

If you visit our login page, we will set a temporary cookie to determine if your browser accepts cookies. This cookie contains no personal data and is discarded when you close your browser.

When you log in, we will also set up several cookies to save your login information and your screen display choices. Login cookies last for two days, and screen options cookies last for a year. If you select “Remember Me”, your login will persist for two weeks. If you log out of your account, the login cookies will be removed.

If you edit or publish an article, an additional cookie will be saved in your browser. This cookie includes no personal data and simply indicates the post ID of the article you just edited. It expires after 1 day.

Embedded content from other websites

Suggested text: Articles on this site may include embedded content (e.g. videos, images, articles, etc.). Embedded content from other websites behaves in the exact same way as if the visitor has visited the other website.

These websites may collect data about you, use cookies, embed additional third-party tracking, and monitor your interaction with that embedded content, including tracking your interaction with the embedded content if you have an account and are logged in to that website.

Who we share your data with

Suggested text: If you request a password reset, your IP address will be included in the reset email.

How long we retain your data

Suggested text: If you leave a comment, the comment and its metadata are retained indefinitely. This is so we can recognize and approve any follow-up comments automatically instead of holding them in a moderation queue.

For users that register on our website (if any), we also store the personal information they provide in their user profile. All users can see, edit, or delete their personal information at any time (except they cannot change their username). Website administrators can also see and edit that information.

What rights you have over your data

Suggested text: If you have an account on this site, or have left comments, you can request to receive an exported file of the personal data we hold about you, including any data you have provided to us. You can also request that we erase any personal data we hold about you. This does not include any data we are obliged to keep for administrative, legal, or security purposes.

Where your data is sent

Suggested text: Visitor comments may be checked through an automated spam detection service.

Get your Free PDF copy of Make Money Simple Again