Many mortgage holders are feeling trapped by rising repayments, but that’s not all they have to worry about
Roughly 25 per cent of mortgage holders are under mortgage stress, which is defined as more than 30% of total household income going towards servicing the loan, according to Will Banks of Shillings Capital.
That means that a AU$750,00 loan has gone up by $1,500 per month since the Reserve Bank of Australia began raising interest rates last year.
This could create compounding issues for mortgage holders. If they are not able to continue paying their mortgages, they may be forced to sell their property at a loss, which then in turn would create further debts through early redemption fees – which could be as high as $40,000.
“There is a huge hangover in regards to these mortgage rate increases and the amount of pressure it’s putting on the economy,” Banks said.
