Are you one of the increasing number of Australian home loan holders who are having problems making their mortgage repayments? Apparently the number of people getting into trouble with their mortgages is on the rise, according to data released earlier this week. Not only that, the prediction is that it’s only going to get worse.
Thanks to the effects of three interest rate rises and the Christmas spending season, the number of people who are in arrears on their home loan repayments by more than 30 days rose significantly in the December quarter, according to figures from a global ratings agency. Borrowers of all kinds are represented in those struggling to make repayments on time but as you might guess, the worst hit are people with “low doc”, so called non-conforming borrowers – the number of these kind of mortgage holders who are now in arrears on their mortgage increased by more than 50% on the previous quarter.
With only interest rate rises in sight, presumably the problems of these mortgage holders are only going to get worse. But how soon interest rates will rise is an interesting question at the moment. While everybody was so sure interest rates would rise in February, you’ll remember that the Reserve Bank of Australia gave us a big surprise by holding the cash rate steady at their February meeting.
The next RBA meeting to look at the cash rate is due to be held on March 2, and after a policy meeting held today, the rumours are starting that there may not even be an interest rate rise in March. The prediction around the industry is that there’s now just a 30% chance of the RBA raising the cash rate on March 2, although everyone still seems certain that the question is not of whether the rates will rise, just when. But if you’re one of the struggling mortgage holders who might be close to falling into arrears, now’s a good time to consider some financial strategies to stop yourself being added to those statistics – before the repayments get even higher.
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