A new study by AMP Bank showed that Australian homeowners under the age of 44 are the most likely to feel worried about the impacts of rate rises — how can they manage their financial wellbeing amid the challenging times?
According to the study, 74% of all homeowners aged 44 and under are concerned about meeting mortgage repayments as rates continues to rise.
Overall, close to around 64% of all mortgage holders expressed concern about their ability to meet repayments.
In fact, more than half have already started to feel the impacts as they stretch their household budgets to “make ends meet”.
Based on the study, the most common categories they cut spending on are food and clothing.
Refinancing was also an option for almost half of Australians, however, younger borrowers are more likely to go this route.
AMP Bank group executive Sean O’Malley said refinancing is a good option to consider, as it can provide support to borrowers struggling to plan their budgets and manage their financial wellbeing.
“Australians are increasingly time poor so understandably refinancing a mortgage is not going to be top of the priority list, but with new digital technology it’s often a lot easier than what people expect,” he said.
Early this year, AMP Bank announced partnership with Nano to develop a digital mortgage product.
The AMP aims to provide potential borrowers with unconditional approvals for residential home loans within minutes.
“Launching a digital mortgage has been a significant step forward to deliver better outcomes for our customers,” Mr O’Malley said.
“With the growth of digital capability, applying for a home loan online has become quicker and easier than ever before.”
AMP’s new digital home loan is currently available for refinancer. It is to be extended to new loans and more fully featured products next year.
Mr O’Malley said on top of refinancing, there are three strategies borrowers can do to better manage their financial wellbeing:
- Get a financial health check – Borrowers must find their bearings by understanding where they are financially. This includes analysing their income and spending using budget tracking apps available online via websites and mobile apps. This would provide insights on their spending patterns.
- Window-shop for home loans – Current borrowers must always be on the lookout for products that might be offer a more competitive deal. This does not mean they must switch immediately — checking the market for new products will help them assess if their current loan is still fit for their needs and circumstances.
- Reach out to the pros — Having someone who can help navigate the competitive mortgage market allows borrowers to make better and informed decisions on their home loans. Brokers, bank representatives, and trusted comparison websites are able to provide information and clarification about certain products or home loan questions.
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