Australian borrowers are increasingly seeking support from mortgage brokers as they navigate the impacts of the rise in home loan rates on their household budgets.
A recent survey by Mortgage and Finance Association of Australia (MFAA) showed that 93% of mortgage brokers reported their clients being more concerned about meeting repayments than they were six months ago.
MFAA CEO Anja Pannek said majority of mortgage brokers stated that they are now assisting clients who are approaching them for the first time to seek guidance regarding their existing home loans.
“Our members have customers coming through the door who’ve never used a mortgage broker, because they need support and they need assistance,” she said.
“While this is an indicator of growing mortgage stress, the silver lining is that 88% of brokers report they have helped negotiate a discount with their customers’ current lenders, while 81% have helped refinance a customer with a new lender.”
For context, there have been twelve increases in the cash rate since May 2022, bringing the target to 4.10%.
While the Reserve Bank of Australia’s Statement on Monetary Policy noted that lending rates have increased by 100bps less than the cash rate, many borrowers still had their household budgets affected due to the higher repayments on top of the increases in costs of living.
The MFAA survey also noted that 89% of brokers have clients who are worried about the fixed rate cliff.
Moreover, a substantial 80% of mortgage brokers indicated a growing trend of “mortgage prisoners”, or those clients who are unable to refinance their current loans due to their failure to meet serviceability requirements.
Ms Pannek said the results of the survey reflect how interest rates are the main driver of the struggles of borrowers, not necessarily the inflation.
“Australian homeowners are concerned about meeting repayments in the wake of persistent rate rises intended to curb inflation,” she said.
“The vast majority of respondents attribute these concerns because of one key factor that does not represent discretionary spending — their mortgage.”
Ms Pannek said in the current environment, homeowners are prone to leaving money on the table if they’re not seeking professional help.
“Negotiating a better deal, budgeting, debt restructuring or extending the terms of a loan are all in the domain of a mortgage and finance broker, so I encourage homeowners to seek professional expert help, rather than struggling through this on their own.”
Buying a home or looking to refinance? The table below features home loans with some of the lowest interest rates on the market for owner occupiers.
| Lender | Home Loan | Interest Rate | Comparison Rate* | Monthly Repayment | Repayment type | Rate Type | Offset | Redraw | Ongoing Fees | Upfront Fees | Max LVR | Lump Sum Repayment | Additional Repayments | Split Loan Option | Tags | Features | Link | Compare | Promoted Product | Disclosure |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
6.04% p.a. | 6.06% p.a. | $3,011 | Principal & Interest | Variable | $0 | $530 | 90% | 4.6 STAR CUSTOMER RATINGS |
| Promoted | Disclosure | |||||||||
5.99% p.a. | 5.90% p.a. | $2,995 | Principal & Interest | Variable | $0 | $0 | 80% |
| Disclosure | |||||||||||
6.14% p.a. | 6.16% p.a. | $3,043 | Principal & Interest | Variable | $0 | $350 | 60% |
| Disclosure |
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Photo by kat_sept2004 on Canva.
Collections: Mortgage News Interest Rates Mortgage Brokers Refinance home loans
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