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New data released by Mortgage Choice has revealed growing confidence among Australian first home owners in the current low-rate environment.
According to the group’s annual First Home Owner Survey, one in four respondents said their interest rate would have to more than double before they felt financial strain.
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Of those respondents, 25.3 per cent said they could comfortably afford at least a 4 per cent increase in interest rates, while a further 36.8 per cent said they could afford at least a 2 per cent increase.
“Given that interest rates generally rise in increments of approximately 25 basis points, the majority of first home owners believe they could comfortably afford at least eight interest rate rises,” Mortgage Choice chief executive officer John Flavell said.
The survey revealed 59.1 per cent of respondents have not considered refinancing their mortgage despite the recent rate movements by many of Australia’s lenders.
“While some first home owners would no doubt have been quick to review their mortgage following the recent rate movements, the vast majority are comfortable in their current product and rate,” Mr Flavell said.
“In fact, the majority of first home owners are so comfortable with their current mortgage rate that they are actually making additional mortgage repayments each month.”
The survey found that more than half of first home owners are making additional mortgage repayments on a regular basis.
“Of those first home owners making additional repayments, 63.4 per cent said they contribute as much as they can afford to their mortgage each month,” Mr Flavell noted.
“This just goes to prove that the majority of first home owners are diligent and savvy with their money.
“They understand that interest rates are sitting at historical lows and as such, are keen to pay off as much of their mortgage as possible while their rates and monthly repayments are low.”
[Related: More borrowers looking to refinance: Aussie]
