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In the new year, over one-third of Australian households are grappling with the challenge of meeting their home loan payments, revealing a worrisome trend among those seeking to refinance.
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According to recent research by Finder, 1.1 million mortgage holders are currently “struggling to pay their home loan in January,” representing a 24% increase from January 2022. Although the percentage of homeowners facing payment difficulties has decreased from the record high of 41% in June 2022, a substantial 35% of Australian households are still contending with monthly mortgage payments.
The study disclosed that mortgage holders with significantly higher expenses are opting to extend their mortgage terms to alleviate monthly repayments, a trend causing concern among experts. Richard Whitten, a home loan expert at Finder, cautioned that while refinancing might release some extra funds, it could prove to be a costly decision in the long run, advising homeowners to exercise caution.
https://propertynoise.co.nz/au/mortgage-holders-crippled-as-banks-rake-in-billions-watch/
Whitten emphasized the importance of reviewing existing home loans to ensure they are not paying more than necessary. He urged homeowners to pay attention to their current lender’s offerings, negotiate for better terms, and explore rates from other lenders to potentially secure a more favorable deal. Additionally, Whitten suggested considering maintaining the original loan term during refinancing to avoid resetting the payment schedule. Alternatively, if opting for a new 30-year term, homeowners should focus on maintaining higher repayments than the required monthly amount.
Highlighting a concerning statistic, the data revealed that 18% of refinancers extended the duration of their home loans, adding an average of 3.5 years when switching banks.
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Whitten stressed the importance of selecting a home loan that provides the best deal, particularly as many Australian borrowers are facing financial stress due to rapidly escalating monthly mortgage repayments. He recommended that the beginning of the year is an opportune time for homeowners to assess where they can save, with the home loan being a primary focus, considering it is likely their most significant expense.
https://propertynoise.co.nz/au/a-historic-number-of-australians-are-currently-facing-the-possibility-of-experiencing-mortgage-related-financial-strain/
SOURCE: NEWS.COM.AU
https://propertynoise.co.nz/au/panic-setting-in-aussie-mortgage-struggles-revealed/
https://propertynoise.co.nz/au/over-270000-landlords-struggling-to-refinance-their-fixed-rate-mortgage-watch/