New research shows 64% of Australian homeowners are worried about rising interest rates.
With concern growing about meeting mortgage payments, the AMP Bank study reveals that the impact is being felt most acutely by younger Australians and those who have purchased a home in the last 12 months – a period when property prices were at record highs.
The research also found 74% of homeowners aged 44 and under are particularly concerned about their finances. Meanwhile, 58% of homeowners have had to stretch their household budgets to make ends meet, with spending on food and clothing among the most common expenses to be cut.
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AMP Bank group executive Sean O’Malley (pictured above) said mortgage repayments currently ranked as the largest expense for 68% of homeowners.
“In addition to budget cuts, 43% of homeowners are considering refinancing their home loan in the next year, with the desire to get a better rate cited as one of the main motivators,” O’Malley said.
“Younger Australians are more open to refinancing with 57% saying they were considering it, which is well above the national average. Among those considering refinancing in the next year, 19% said the complexity of the process was top of mind as a barrier and 13% cited the time commitment required to refinance as a barrier.”
O’Malley said as more Australians looked at the opportunity to refinance their home loan, an easy and efficient application process and fast approval was becoming increasingly important.
“We know it’s a tough time for homeowners facing into higher interest rates. For some, refinancing their home loan might help to save money and improve overall financial wellbeing,” he said. “Australians are increasingly time poor, so understandably refinancing a mortgage is not going to be top of the priority list, but with new digital technology, it’s often a lot easier than what people expect.”
O’Malley said launching a digital mortgage had been a significant step forward to deliver better outcomes for AMP Bank customers.
“The digital mortgage, which launched today, makes the refinancing process simpler and in most cases a lot faster,” he said. “In the time many people spend commuting to work, it’s possible to apply and receive approval. With the growth of digital capability, applying for a home loan online has become quicker and easier than ever before.”
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O’Malley has provided three tips for mortgage holders to manage their financial wellbeing:
Find your bearings: Start by clarifying exactly where you are financially, including both your spending and income, then take advantage of one of the many budget/tracking apps that provide a clear view of your spending patterns.
Check your home loan is right for you: There are a range of home loan products on the market which come with different features based on customers’ preferences, needs and eligibility. Consider what loan options best suit you and your individual circumstances.
Get assistance when you need it: There’s plenty of research showing that people who draw on expert advice are less financially stressed and make better decisions. Use reputable sources such as your financial institution, government resources and trusted third-party comparison websites.
