Credit cards are now becoming a big part of the financial lives of millions of people.They're used to make the payments you might make on a credit card.They're also a convenient way to get your mortgage, especially if you've got a family member with the same income level as you.But they can also be risky if they're used incorrectly, as was the case in this recent story.The story starts in 2007 whe...
More than one million Australian households are at risk of losing their homes, as interest rates rise, the latest mortgage rate forecast for the state shows.
The ABS is forecasting the state’s housing market will see an average 3.9 per cent increase in average interest rates from 2019, while home prices will rise by 3.4 per cent over the same period.
The rate rises are due to the government’s housing finance plan, which was introduced in November, and will see home buyers’ monthly mortgage payments increase by an average of 7.6 per cent, up from 5.2 per cent in 2020.
Borrowers can also borrow up to an extra $50,000 from the government for their first mortgage payment.
The policy, which the ABS calls the “Home Buyers’ Guarantee”, was introduced to help homebuyers buy their first home and secure their first payments.
The new policy also includes an increase in mortgage insurance premiums, a rise in the minimum down payment, and the ability for borrowers to choose from a range of finance options.
The changes are expected to have a significant impact on the cost of housing.
“The impact of this measure is expected to be to increase mortgage interest rates on existing borrowers by around 7 per cent,” the ABS said.
The latest data from the Reserve Bank showed that the median cost of a new home in Australia was $1.7 million in 2019, up 3 per cent from the previous year.
In addition, there were 8.4 million mortgage payments made to mortgage lenders in 2019.
While the price of a property has increased since last year, the median price has fallen by 8.3 per cent.
“There are two ways to interpret the trend,” the Bank of Queensland said in a note to clients.
“Firstly, the increase in interest rates and the increase to mortgage insurance prices could mean that home buyers are more willing to consider a lower down payment and higher down payment range in order to buy a home.”