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Increasingly ditched end-of-year holiday plans are putting mortgage refinancing in focus, latest Aussie Home Loans information has revealed.
It might have taken several months, but rising interest rates are “getting in the way” of many Australians' holiday season plans as 2022’s end draws nearer, according to the latest data from mortgage lender Aussie Home Loans (AHL).
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Rate rise stress is seeing “half of Aussies change their holiday plans”, explained AHL, whose latest research showed three in 10 households already admitting they have cancelled their upcoming festivities and holidays.
Overall the data revealed 7 in every 10 households have been forced to reduce spending on holidays and gift buying this season – with urging mortgage holders to look at their existing mortgage to see if they can avoid this situation and gain relief.
The AHL research was conducted to examine the effects rate rises are having on living standards for Australians, the lender explained.
It further revealed that 28 percent of Aussies have already had their holiday plans impacted by the rate increase, while 16 percent of people are planning to spend less on gifts this year.
Interestingly, eight in 10 millennials (84 per cent) were most concerned about the impact to their seasonal plans, followed by Gen X (73 per cent) and Baby Boomers (50 per cent).
ADL confirmed that this study was conducted by YouGov online between 27th -31st of October 2022 and comprised a “nationally representative sample” of 1,025 Australians aged 18 years or older.
Following the completion of interviewing, the data was weighted by age, gender and region to reflect the latest ABS population estimates, it stated.
Options available to deal with rate rises
Aussie CEO of distribution Brad Cramb stated: “Now, more than ever, Aussies are keen to get back out and travel and enjoy the holiday season with family and friends, so it’s concerning that rate rises are getting in the way of these plans for so many people.”
“As the holiday season creeps up, people are really starting to feel the pinch of higher repayments and with discretionary spending on the chopping block, holidays and Christmas gifts are the first to go” Mr Cramb explained.
The company, though, reminded Australians it’s important for them to realise there are options available to deal with the rate rises so they can still enjoy a festive holiday season.
“For example - if you’re currently sitting at a home loan of $650,000 with a rate above 5 per cent - there are refinance options available that could have you saving $95 a week, $400 a month, or over $4000 across the year - a significant saving for many households ahead of the summer season” Mr Cramb explained.
Don’t fear the fear!
Aussie broker Michael Collins advised: “Absolutely go and chat to someone about your loan.”
“People still fear what they might hear, but what they might hear could be worthwhile or better,” he explained.
“We’ve seen so many mortgage holders reclaim their holiday plans by picking up the phone and asking about refinancing,” he said.
“Whether it’s working with them to reduce fees, refinancing to lower rates, no fee home loans or even taking advantage of cashback offers, there are many options available to relieve mortgage stress and anxiety, especially at this time,” Mr Cramb added.
Aussie top tips to borrowers this summer
-“Get to know your home loan: How does it fair in the market and is it costing you more than it needs too?”
- “Take 20: A 20-minute finance check with your household could work out what’s necessary, what’s nice-to-have and what’d you’d prefer to spend on most.
- “Don’t shop ’til your finances drop: Cap your major purchases and if you’re still feeling the pinch, get creative, think Kris-Kringle, homemade, home-baked or home-shared.
- “Cater ahead: Prior to celebrations consider pre-buying, pre-cooking and pre-freezing.
- “Consolidate credit cards: Instead of multiple cards to draw from, cut and consolidate to the lowest rate option – especially important if you plan to refinance to reduce debt liability.
- Offset it: Consider an offset account to reduce the amount you pay in home loan interest, whilst still earning interest.”
[Related: ‘Rate shock’ spikes borrower concerns]
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