![]() ![]() "If it is going to be too much to repay, then look at selling near the end of your fixed term and downsize into something more affordable." "Then it's not a shock when your rate jumps to that level and if you need a buffer, then you're not going to be on your knees," he added. (Ray White Norwood) 41 Glen Street, Kelvin Grove, Queensland See photos of the listing here Two-bedroom property features a renovated kitchen. 1A Collyer Court, Linden Park, South Australia See photos of the listing here Duplex-style home in Adelaide contains two bedrooms and one bathroom. "My best advice is two key items - do the numbers on what your repayments are expected to be and then pay the loan as if it was that rate. "Some clients are saying we need to pull our heads in on spending because our mortgage is going to be taking up 50 per cent of everything, and that's a very stretched position to be in," Unkles said. Melbourne-based 40Forty Finance director and mortgage broker Will Unkles said borrowers should plan for rising repayments.Ĭlients were already getting in touch to discuss options for when their fixed term ends, he said, and some are considering fixing their loans. (Jellis Craig Stonnington) 157 Davey Street, Hobart, Tasmania See photos of the listing here Two-bedroom home has a price guide of $875,000 and above. 15 Primrose Street, Prahran, Victoria See photos of the listing here Two-bedroom Victorian in Melbourne has a price guide of $1,595,000. Homeowners on fixed rates should speak with a mortgage broker or bank to see if they can secure a better deal once their fixed rate ends, and make extra payments now to get ahead, Tindall said. Some will be facing the tough reality that their home is worth less than they paid, making it difficult to qualify for another loan at a better rate. "Basically prices are dropping which is ultimately a good thing for people looking to buy."īut falling house prices were an issue for homeowners looking to refinance, including those on a fixed rate that expires this year, she said. "The housing affordability issue is a double-edged sword really," Tindall said. Potential options for someone who took out a two-year fixed rate loan in July 2021. Those who borrowed $1 million face a jump of up to $2,722 per month in repayments from July. (Luis Enrique Ascui)Īnother affordability challenge this year will be that homeowners on fixed interest rates are facing a mortgage cliff, or higher repayments when their fixed term ends.Ī homeowner who took out a fixed-rate loan of $500,000 that finishes in July would face a rise of $1,365 per month in repayments if they don't renegotiate, RateCity's analysis showed. Mortgage repayments are rising so fast, experts warn. ![]() RateCity research director Sally Tindall said potential buyers had already faced cuts to their borrowing capacity.įor an average single-wage earner, paid $92,030 a year, who has no dependents, no additional debts and minimal expenses, their borrowing capacity has already fallen by $138,900 since April. "So there won't be a huge amount of relief for affordability." "Ultimately, we'll have a housing market where it's more difficult for homeowners to service on a month-to-month basis," he said. "It's just shifting the affordability issue from an upfront one, to ongoing. "Prior to the pandemic, the biggest hurdle for first home buyers was deposit affordability, but that has now shifted to mortgage serviceability," McMenamin said. READ MORE: Sydney suburbs where first home buyers could purchase for under $1m 22 Ryder Street, Darlinghurst, New South Wales See photos of the listing here Renovated terrace in Sydney contains two bedrooms and one bathroom. Several bank economists forecast peak-to-trough property price falls between 15 per cent and 20 per cent. National home values have so far fallen 8.4 per cent from their peak, on CoreLogic data. ![]()
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