According to a new research, the rapid increase in the mortgage rates in Australia means that a growing number of recent first-time homebuyers are suffering with huge mortgage debt, and could even lose their homes.
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An exclusive study conducted by financial services firm Fujitsu shows that mortgage stress in Australia is now affecting 40 percent of the 270,000 individuals who have entered the property market since June 2008.
Martin North, consulting executive director of Fujitsu, said that most of the homeowners questioned had not expected mortgage rates to hike as quickly as they have seen in recent months. On Tuesday, the increase by the Reserve Bank of Australia (RBA) was the third in three months and the sixth since October last year.
Mr. North added that 95 percent of people suffering with mortgage stress, and selling their houses, considered it to be the only way out. Others struggling with repayment may choose to compare mortgage and refinance their homes under a more affordable home loan package.
Major lenders in Australia responded to RBA’s increase by raising their own mortgage rates. Commonwealth Bank was first to follow by increasing its standard variable rate by 25 basis points, to 7.36 percent from 7.11 percent.