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MFAA chief executive Phil Naylor has dismissed industry reports that warn another rate rise will double the number of people who default on their loans.
According to Mr Naylor, the MFAA’s mid-year survey of 974 homebuyers found that only 26.5 per cent of respondents expected rates to fall further over the next three years, suggesting that borrowers had realistic expectations about future rate rises.
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“The survey found 83.6 per cent of respondents were easily making their loan repayments - up from 76 per cent six months earlier,” Mr Naylor said.
“Some industry figures are warning a rate rise will almost double the number of people who default on their loans, but the evidence suggests this is exaggerated. And in any case the percentage of defaulters is less than half a percent of all mortgage holders.”
While Mr Naylor confirmed that some borrowers may have difficulty adjusting to their higher repayments, any increase in interest rates by the Reserve Bank suggests the economy is strengthening and should be seen as good news.
“Mortgage rates cannot stay at historic lows forever. There is good news in a rate rise as well as bad,” he said.
