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ISCOVER
Staff Reporter
Borrowers who miss their mortgage repayments could be forced to pay an additional $33,000 in interest and late fees, new research has found.
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According to data from RateCity, skipping mortgage repayments for one month every year would add over two years to the loan term and could cost a $300,000 home loan an extra $33,300 in interest and late fees (based on a 25-year term with a projected average interest rate of 7 per cent).
The company’s chief executive Damian Smith said missing a repayment will cost borrowers significantly more in the long-term.
“While the fee charged for missing a mortgage repayment is not generally a lot of money for most borrowers, you must remember that every time you skip a payment that month is added to your loan term,” he said.
“The average mortgage ‘arrears administration fee’ or late fee is $34 per month and the majority of lenders charge this fee. Westpac is one of the cheapest at only $9 per month, and it ranges up to $195 per month.
“But missing a payment here and there can really add up, making it not worth the short reprieve.”
