The study of over 1,500 Australians, commissioned by Experian, found younger mortgage holders are the most worried about a rate hike.
A total of 26% of millennials (18-34 years old) and 26% of Gen X (35-55 years old) said they are ‘extremely concerned’ about their ‘ongoing ability to make mortgage repayments’ if interest rates rise by 1.5%.
Only 10% of Baby Boomers were concerned about their ability to make mortgage repayments if rates rise 1.5%.
The survey also showed that 22% of Australian millennials have already been unable to make a mortgage repayment in the last 12 months, which is twice the overall average of 11%.
Suzanne Steele, Managing Director of Experian Australia/NZ, said the results are particularly concerning for younger generations who were most likely first home buyers.
But… there’s still time to get yourself sorted.
ME Head of Home Loans, Patrick Nolan, said, “The cost of fixed rate funding has increased, which may indicate the cash rate has reached the bottom of its cycle.”
All of the big four banks have now lifted interest rates for investor property loans; and it’s fairly safe to say that interest rates for owner-occupier loans could rise in 2017 too.
Nolan said that borrowers should be looking at their finances now to make sure they can accommodate future higher interest rates.
“The cash rate could start rising from the end of 2017,” predicted Nolan.
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