12% of Aussies behind on home loan repayments: What it means for the Australian economy
12% of Aussies behind on home loan repayments: What it means for the Australian economy
As of November 2023, 12% of Aussies are behind on their home loan repayments. This is a significant increase from the 7% who were behind on repayments in March 2023. The number of Aussies in mortgage stress has also increased, with 1.5 million people now at risk of defaulting on their loans.
There are a number of factors contributing to this increase, including:
- Rising interest rates: The Reserve Bank of Australia has raised interest rates several times in recent months in an effort to combat inflation. This has increased the cost of borrowing for homeowners, making it more difficult for them to afford their repayments.
- High cost of living: The cost of living in Australia has been rising steadily in recent years. This has put pressure on household budgets, making it more difficult for people to save money and meet their financial commitments.
- Overleveraged households: Australian households are some of the most leveraged in the world, meaning they have a lot of debt relative to their income. This makes them more vulnerable to economic shocks, such as interest rate rises.
The rise in mortgage arrears is a concerning sign for the Australian economy. If a large number of people default on their home loans, it could lead to a wave of foreclosures and a decline in house prices. This could have a knock-on effect on the wider economy, leading to job losses and a recession.
The Australian government and the Reserve Bank are aware of the risks posed by the rise in mortgage arrears. They are taking a number of steps to address the issue, such as providing financial assistance to struggling homeowners and tightening lending standards.
However, it is important to note that these measures will take time to have an effect. In the meantime, it is likely that the number of Aussies behind on their home loan repayments will continue to increase.
What can homeowners do if they are struggling to make their repayments?
If you are struggling to make your home loan repayments, there are a number of things you can do:
- Contact your lender: Your lender may be able to offer you a repayment holiday or other assistance.
- Seek financial advice: A financial advisor can help you to assess your financial situation and develop a plan to manage your debt.
- Consider selling your home: If you are unable to manage your repayments, you may need to sell your home. This is a difficult decision, but it may be the best option for you in the long run.
The Australian government also offers a number of assistance programs for people who are struggling to make their home loan repayments. These programs include the First Home Loan Deposit Scheme, the Home Loan Guarantee Scheme, and the National Housing Strategy.
If you are concerned about your ability to make your home loan repayments, it is important to seek help early. The sooner you get help, the more options you will have.tunesharemore_vert
