1 in 8 mortgage holders have missed repayments: Survey

New research has found a “worrying” number of home owners struggling to meet their mortgage repayments.

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A survey conducted by Finder of 1,071 respondents (342 of whom hold a mortgage) has revealed that 12 per cent have missed one or more repayments over the past six months.

According to Finder, this equated to an estimated 396,000 borrowers falling behind on mortgage repayments over this period, with 4 per cent of mortgage holders (132,000 households) indicating that they’ve missed at least one repayment.

Additionally, 8 per cent of mortgage holders said they did not meet multiple repayments, with 3 per cent stating that they requested a repayment holiday or applied for hardship assistance from their bank or lender.

These findings come as a survey conducted by the Australian Securities and Investments Commission (ASIC) through YouGov revealed that 47 per cent of Australian adults with debt (equating to 5.8 million people) have struggled to meet repayments over the last year, with cost-of-living pressures, reduced income, and unexpected expenses being among the top reasons.

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The research further revealed that just under a third of borrowers (32 per cent) said they are worried that they will miss a repayment due to mortgage stress, putting over 1 million mortgage holders at risk of arrears.

A third of those who missed a repayment (33 per cent) said they ran out of funds due to other bills, while 31 per cent stated interest rate increases resulted in them no longer being able to afford their mortgage.

Finder’s home loan specialist Richard Whitten said mortgage defaults are becoming a “growing concern”.

“Thousands of mortgage holders have weathered rate rises but are now experiencing extreme financial strain as savings and emergency funds run dry,” Whitten said.

“Any further hikes would push many to breaking point.”

He added that mortgage holders are “forking out a disproportionate amount” of their income in order to pay off their mortgage.

Indeed, the latest Housing Affordability Report released in collaboration with ANZ and CoreLogic earlier this year, revealed that the portion of median income needed to service a new loan median dwelling value grew to 48.9 per cent nationally (as of the March quarter of 2024), as home values continued to hit record peaks over the last six months.

“Interest rates rose so rapidly that mortgagors have reached breaking point with some unable to stay financially afloat,” Whitten said.

Whitten has urged home owners to review their home loan options and to negotiate better deals with their lenders.

“Refinancing, switching to interest only or increasing the payment term are all options for stressed borrowers,” he said.

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