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ISCOVER
Staff Reporter
Nearly 85 per cent of homeowners feel positive about their current financial situation, according to a new survey.
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The research, conducted by Mortgage Choice, found 23 per cent of borrowers believe their financial position is solid, while 61 per cent thought their position was reasonable.
While the current low interest rate environment has translated into significantly lower mortgage repayments for most borrowers, Mortgage Choice’s head of corporate affairs, Belinda Williamson, said the findings are a welcome indication that most homeowners are feeling optimistic about their ability to manage their finances.
The results of the survey show that while a majority of homeowners feel positive about their financial position, their most pressing financial concern at present is ‘repaying my mortgage’, with 37 per cent responding in this way.
This was followed by the ‘cost of living’, at 25 per cent, and ‘repaying credit card debt’, at 16 per cent, representing the top three responses.
“The fact that over one third of homeowners may see their mortgage repayments at the top of their financial priority list is a really encouraging sign because let’s face it: for many Australians, taking out a mortgage is often the biggest financial decision they will make, so it is sensible to take that commitment seriously,” Ms Williamson said.
The survey also found that a majority of homeowners were making additional repayments towards their mortgage.
The most common method for making extra repayments was contributing as much as possible to each repayment but redrawing funds if necessary. This was followed by contributing as much as possible and avoiding any temptation to redraw the funds.
“If your investment strategy or overall goal is to repay your home loan then making extra payments is a great habit to get into. It will help you to repay the home loan sooner and to build up a buffer to cope with future interest rate rises or changes to your financial situation,” Ms Williamson said.
“It was interesting to see that of those people who were making additional mortgage repayments, over 50 per cent said they had not made any lifestyle sacrifices to do so. When asked whether they would continue to make additional repayments if interest rates go up, nearly 45 per cent said they would as they had already factored in higher repayments.”
