August 27th 2024.
Many individuals who have taken out a mortgage are facing immense pressure as they struggle to keep up with their loan payments. In fact, according to a recent study by Finder, 40% of mortgage holders are putting more than 30% of their income towards their home loans. This is significantly above the widely accepted threshold of 30% for mortgage stress.
Furthermore, the study also revealed that almost one in four mortgage holders are spending more than half of their earnings on loan instalments. Graham Cooke, the head of consumer research at Finder, expressed concern over the impact of soaring interest rates on households. He stated that with four in ten mortgage holders experiencing mortgage stress, the current situation is one of the toughest in decades.
Cooke also noted that there is a glimmer of hope as some major banks have recently lowered their fixed rates. This has sparked optimism that interest rates may soon drop, providing some much-needed relief for struggling homeowners. However, Cooke warned against fixing a loan solely for the purpose of saving money, as variable rates could potentially decrease significantly in the near future.
For those who are struggling to make their loan payments, Cooke suggested seeking better deals on utilities and cutting back on non-essential expenses. He emphasized that even small savings can make a significant difference in the long run, and encouraged individuals to redirect those savings towards building an emergency fund.
In addition, Cooke advised against relying on quick fixes and instead encouraged individuals to take a proactive approach in managing their finances. He also urged readers to stay updated on the latest news, celebrity gossip, and sports updates through their WhatsApp channel, which provides a private and secure platform for receiving breaking news.
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