August 27th 2024.
Many homeowners are currently facing a difficult situation as their mortgage payments continue to consume a larger portion of their overall household income. Recent research conducted by Finder has revealed that a staggering 40% of mortgage holders are dedicating more than 30% of their earnings towards their home loans. This is a significant cause for concern, as 30% is widely considered the threshold for mortgage stress, according to Finder.
The study also found that 23% of respondents are putting more than half of their income towards their loan repayments, highlighting the immense strain that many households are under. Graham Cooke, head of consumer research at Finder, commented on the impact of rising interest rates on families, stating that "Mortgage holders are facing the highest home loan costs in decades, with four in ten experiencing mortgage stress." This is a result of the 13 interest rate hikes that have taken place since 2022.
However, there is a glimmer of hope for those struggling to make ends meet. Some major banks have recently reduced their fixed interest rates, leading to speculation that overall rates may soon decrease. Cooke advises that fixing one's home loan could be a worthwhile option for those seeking financial stability and budgeting ease. But he also warns that fixing a loan solely for the purpose of saving money may backfire if variable rates suddenly drop in the near future.
In addition to considering alternative loan options, Cooke also encourages homeowners to make small changes in their daily expenses. This could include seeking better deals on utilities and cutting back on discretionary spending, such as takeaway meals. These seemingly insignificant savings can add up significantly and make a big difference by the end of the month. Cooke also suggests creating an emergency fund by diverting any saved funds from unnecessary expenses.
For those looking to stay updated on the latest news, celebrity gossip, and sports updates, Finder has launched a WhatsApp channel. This platform promises to provide information without any pesky comments or algorithms, and with complete privacy for its users. Cooke and the team at Finder are dedicated to helping individuals facing financial challenges and urge anyone struggling with loan repayments to seek out better deals and cut back on unnecessary expenses.
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