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By: Staff Reporter
More than 40 per cent of Australians spend half their monthly income repaying debt.
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According to a new survey by Loan Market Group, only a quarter of Australians spend less than 20 per cent of their income repaying their debts.
Of the 400 respondents, 44 per cent spent the vast bulk of their disposable income on their monetary obligations.
Loan Market chief operating officer Dean Rushton said the survey results showed how vulnerable many Australians were to interest rate fluctuations.
“Almost 30 per cent of respondents to the survey said they spent more than 50 per cent of their income on debt repayments, which is quite a staggering statistic,” he said.
Mr Rushton said the Reserve Bank of Australia (RBA) had a delicate task responding to the economic recovery through its movements with the official cash rate.
“The RBA has been moving interest rates back up as more evidence emerges that Australia’s economy is continuing to perform strongly,” he said.
“But the central bank also has to consider that many consumers are carrying incredibly high debt burdens.
“If official rates go back up to traditional levels of around 5.5 per cent from the current level of 4.25 per cent too quickly then a lot of mortgage holders will be struggling to make their repayments.”
