More Borrowers Making Mortgage Repayments
Posted July 22nd, 2009
More home loan borrowers in the country are making mortgage repayments as reduced interest rates and financial awareness see more people resulting to conservative spending. Australians are reducing their debt across the board as was recently revealed by a survey of 2000 consumers by Genworth Financial.
The survey that took place in late April and May 2009 shows a growing amount of borrowers debt-free (21 per cent), compared with 18 per cent in 2008.
Many do even more by overpaying their mortgages to reduce their debt even further. This year 41 per cent of those surveyed were paying surplus cash into their mortgage repayments whereas last year the same group of people was only 31 per cent of the surveyed lot.
At the same time, there has been a decline in struggling home loan borrowers by five per cent.
Martin Barter, chief executive of Genworth attributed the improvement to lower interest rates and an increase in consumer sentiment. He said: “The earlier stressed borrowers seek assistance from their lender, the more likely they are to get back on track and stay in their homes.”
The company provides LMI (lenders mortgage insurance) to over 100 lenders and banks in the country.
Another contributing factor to the current situation was attributed to the extension of the Federal Government’s first home owners grant. This prompted a record level of first home buyers, rising to 29.5 per cent over last year’s figure of 19.4 per cent.
Between September last year and April 2009 the Reserve Bank of Australia lowered the official cash rate by 425 basis points. This is indicative of a 12-year high with 7.25 per cent to a 45-year low of three per cent.
Of those people surveyed, the average age was 41.4 years with a median household income of between $50,000 and $100,000 per annum. Out of those, 41 per cent had a yearly income of less than $50,000.
Common debts cited were student loans, personal loans, car loans, credit cards, investment loans and store finance.
Credit card debt has fallen by eight per cent since the start of the global crisis, and throughout all forms of unsecured debt, reductions have been found.
Source: News.com.au
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Comparison of our Top Credit Card Offers
| Interest Rate (p.a.) | Balance Transfer Rate (p.a.) | Annual Fee | Cash Advance Rate (p.a.) | |||
|---|---|---|---|---|---|---|
Bankwest Breeze MasterCard | A low interest rate on everyday purchases with a low balance transfer offer | 0% for 6 months (reverts to 10.99% ) | 4.99% for 9 months | $49 | 21.99% |   |
Citibank Clear Platinum Card | A low interest rate offer on balance transfers and purchases | 11.99% | 0% for 12 months with 3% handling fee | $99 | 21.74% | |
St.George Vertigo | An introductory offer on balance transfer and a low annual fee | 13.24% | 0.99% for 6 months | $55 | 21.49% | |
Virgin Flyer Credit Card | Earn 1 velocity point per $1 spent, plus an introductory offer on balance transfers | 20.99% | 1.9% for 12 months | $50 (for first year thereafter $99) | 20.99% | |
Westpac 55 Day Credit Card | No annul fee for the first year with a low rate on balance transfers and purchases | 0% for 5 months (reverts to 19.59% ) | 3.99% for 6 months | $0 annual fee for the first year ($30 thereafter) | 21.49% | |
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