It leaves many paying thousands of dollars extra month on mortgage repayments.
Cully, who purchased a Quakers Hill home for himself and his daughter, is relying on one wage, so finding an extra $1000 per month has not been easy. He is not alone. Many recent buyers are having budgets stretched more than expected, as rapid rate hikes have surpassed the mortgage serviceability buffers used to stress test their loans for if rates climbed.Monthly repayments for a home owner on an average income of $94,000, who borrowed to their maximum capacity of $524,000 in May 2021, have already increased by $1124, Canstar modelling shows.
Even a home owner who purchased the following year, when the serviceability buffer had lifted to 3 percentage points, is paying $235 more per month than what they were stress tested at.It comes as new Roy Morgan research shows an estimated 1.38 million borrowers, or 27.8 per cent, were at risk of mortgage stress in the three months to April, the highest number since the global financial crisis.
“Some of the pressure ... across the mortgage belt is starting to appear,” he said. “The risks out there are starting to accelerate ... because the roll-off of [lower] fixed rates accelerates in the second quarter,” Hassan said. Mickenbecker said mortgage stress would hit recent borrowers and first home buyers hardest as they had very little chance of building up savings or making extra repayments before rate hikes began.Two Red Shoes founder and mortgage broker Rebecca Jarrett-Dalton said many borrowers were feeling the heat as variable rates exceeded what they had been stress tested at.
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