Generation Y mortgage holders are capable of repaying their mortgage at an interest rate of at least nine per cent, a mortgage broker survey says.

According Mortgage Choice’s 2009 consumer sentiment survey, 64 per cent of existing borrowers aged 18 to 29 years said they could afford repayments at, or above nine per cent.

Of those, almost half - 46 per cent - are prepared to repay at 11 per cent or more.

“Financial markets are predicting that by this time next year the cash rate will have returned to a more neutral level of around 5.5 per cent, which means variable mortgage interest rates will stand at around eight per cent,” Mortgage Choice senior corporate affairs manager Kristy Sheppard said.

“Looking at our survey results indicates a high percentage of existing borrowers will adjust relatively easily to rate rises.
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One in six Australians is already having problems repaying their debt even without the added burden of rising interest rates, a new survey has found.

The research, released by business information service Veda Advantage on Tuesday, also found that more than 20 per cent of people applying for credit during the next six months say they are having difficulty paying debts.

Nearly a quarter of those struggling to pay bills owe more than they did a year ago.

While the majority of families was managing credit responsibly and continuing to pay down debt obligations, a small but sizeable group was struggling, Veda Advantage general manager Russell Evans said.
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Australians are vulnerable to interest rate rises because their housing debt is close to record levels, according to a report which coincided with the central bank’s first official rate increase in 19 months.

The Australian Mortgage Industry Report, produced by JPMorgan and Fujitsu Consulting Australia and released on Tuesday, said interest payments on mortgages will rise to 11 per cent of disposable income, close to the 2008 peak of 12 per cent, if home loan interest rates rise by a “modest” two percentage points.

Mortgage interest payments had fallen to five year lows after the Reserve Bank of Australia (RBA) reduced the overnight cash rate to a 49-year low three per cent in April this year.

But the RBA reversed the direction of interest rates on Tuesday, raising the cash rate by 25 basis points to 3.25 per cent.
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Treasurer Wayne Swan says the decision by the central bank to raise its cash rate will make it tougher for families.

The Reserve Bank of Australia (RBA) on Tuesday raised the cash rate by 25 basis points to 3.25 per cent following its monthly board meeting.

A majority of economists had expected the RBA to leave the rate at its “emergency” level of 3.0 per cent for at least another month.

The RBA had cut the rate by 425 basis points between September 2008 and April 2009 in the heat of the global economic downturn.
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A new survey has found one in five property owners say they’d find themselves in severe mortgage stress if their monthly home loan repayments are increased.

The Reserve Bank of Australia has flagged it may soon have to lift the cash rate from its emergency rate of three per cent.

Economists say the cash rate could increase to five per cent over the next 18 months .. which would increase monthly mortgage repayments by 450 dollars a month on an average 340-thousand dollar mortgage.
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According to Mortgage Choice, unique economic factors are offering Australians a rare opportunity to gain a stronger footing on the property ladder.

Decades-low interest rates, increased house-hold wealth and improved affordability are helping potential buyers find it easier to enter the market while putting extra funds into the hands of property owners.

Mortgage Choice encourages property enthusiasts to take advantage of the current economic situation by cutting time off their loan term and money off their loan debt.

Mortgage Choice senior corporate affairs manager, Kristy Sheppard said, “Interest rates are at a historical low, which is terrific for those paying off a property, and this combined with improved affordability means borrowers should think of the economic downturn as an opportunity to get ahead with their mortgage rather than an incentive to spend.
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Leading mortgage broker Loan Market Group has recommended mortgage holders prepare for interest rates to rise again after reaching near record lows.

Loan Market Group Executive Director John Kolenda said Friday’s decision by the Commonwealth Bank of Australia (CBA) to increase its variable rate by 0.10 per cent to offset higher funding costs was a warning sign to home owners.

“If we have not reached the bottom of the interest rate cycle then we are not far from it,” Mr Kolenda said.

“The official cash rate is currently at 3.0 per cent and we still believe there’s a possibility the Reserve Bank of Australia could lower rates again if the economy remains in the doldrums.
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Mark Philippoussis is facing financial collapse, with creditors saying he’s stopped paying the mortgage on his Williamstown home in bayside Melbourne.

The 32-year-old former tennis star has told the Sunday Herald-Sun newspaper he’s going through the toughest time of his life as he faces a $1.3 million legal battle.

“Money came in left, right and centre; you just thought that’s how it was for everyone and that’s how it will always be,” he said.

The one-time Davis Cup player earned more than $8 million on the court and millions more in sponsorships, but is being sued for failing to pay the mortgage on his Williamstown home which he shares with mother Rossana.
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An analysis has revealed that the major banks are making $450 a year more from each average home mortgage today than before the global financial crisis as they exploit weaker competition from non-bank lenders.

The cash grab by big banks, revealed in the analysis conducted for The Australian newspaper, threatens to further increase tensions between the banks and the Rudd government.

The banks have cried poor, declaring they cannot afford to pass on the full benefit of the Reserve Bank’s latest 0.25 percentage point interest rate cut because they are suffering from increased costs.
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A new survey has challenged the long-held view that mortgage repayments were always a No.1 priority, with about one third of respondents saying they’d skip a repayment in order to pay all their bills.

Dun & Bradstreet’s (D&B) Payment Priorities Study found 31 per cent Australians with a home mortgage said they would be prepared to skip a loan repayment if they did not have enough money to pay all their bills.

D&B chief executive Christine Christian said the survey results challenged the view that mortgage repayments were always the No.1 priority.
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