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Aggregator Mortgage Choice commissioned a survey (conducted by Honeycomb Research) of 1,000 people that aimed to reveal the effects that rising interest rates have had on borrower and buyer attitudes towards property and home loans.
The survey found that 76 per cent of mortgage holders along with 78 per cent of prospective buyers had postponed a “big life decision” due to the current economic climate.
According to the research the most common life decisions that were postponed due to higher interest rates were saving money (50 per cent of mortgagors and 40 per cent of prospective buyers), buying a car (31 per cent and 21 per cent, respectively), and buying a new home or investment property (28 per cent and 42 per cent).
In addition, the survey revealed that 11 per cent of prospective property buyers postponed starting a family, while 19 per cent of respondents aged 55 and over have postponed retirement plans.
Mortgage Choice chief executive Anthony Waldron said while these findings were worrying, they’re “unfortunately not surprising”.
“We know that Australians’ borrowing power has reduced by as much as 30 per cent since the Reserve Bank of Australia (RBA) first started raising the cash rate in May 2022,” Mr Waldron added.
“Every day our brokers are meeting with worried borrowers – in particular those facing the end of their fixed term rates and potential increases of more than $1,000 per month in their mortgage repayments.”
He added that the 12 interest rate hikes over the last 15 months along with the rising cost of living have put “pressure on people’s hip pockets” and have urged borrowers and buyers alike to turn to their mortgage broker for help.
“Your mortgage broker can help you plan for your next life stage and show you how your home loan can work around these changes in the economy,” Mr Waldron said.
“As the cost-of-living rises, it’s easy to feel like you don’t have options, but a broker can model different loan scenarios so you can make informed choices.”
These survey results followed the Australian Bureau of Statistics (ABS) recently indicating that the sharp rise in mortgage interest charges has been the primary driver of a significant increase in living costs for Australians.
Mortgage interest charges lifted by 91.6 per cent over the year to June 2023, compared to the 78.9 per cent increase reported in the previous quarter of March 2023.
According to the ABS, the surge came off the heels of banks passing on the rate hikes implemented by the Reserve Bank.
[RELATED: Record living costs linked to mortgage rates: ABS]
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