Mortgagees scraping by, not for long: Mozo

New research from Mozo has indicated close to three quarters of Australian mortgage holders surveyed said they cannot afford any further back-to-back interest rate hikes past May this year.

Echoing general sentiment that mortgagees are being pushed to the brink to make their repayments, the research also found 20 per cent of borrowers said they already cannot afford any rate rises this year and a further 16 per cent will have difficulties if rates increase in March by 25 basis points.

This comes as all of the Big Four Banks predict a 0.25 per cent rate rise to 3.60 per cent, while NAB and ANZ predict this will continue to hit a peak of 4.10 per cent in June.

“Despite countless explanations from the RBA of why rates are continuing to rise, it doesn’t make it any easier on household budgets,” Claire Frawley, Personal Finance Expert at Mozo, said.

“The compounding effect of these rate increases has seen mortgages increase by thousands of dollars a year.

“It’s really shocking to think how many households will be struggling if there are more rate rises. Everyone has already been making big sacrifices when it comes to finding extra cash, now they will need to decide what’s next on the chopping block.”

Mozo also said a 25-basis-point increase in March from the Reserve Bank of Australia (RBA) would add $92 to monthly repayment amounts on a $600,000 mortgage, contributing to a total increase of $14,172 for a borrower after the past 10 rate rises.