abc.net.au/news/housing-apra-rba-forced-sales/101772904As COVID hit and the Reserve Bank cut interest rates to record lows to stimulate the economy, Aaron Doull and his wife Saori took out an $850,000 loan to buy their first home.But next year, when the couple come off that fixed loan, they'll face variable interest rates of around 6 per cent. That's well above the 2.5 per cent serviceability buffer that their loan was based on.
Mr Doull reckons they have about six months worth of savings to get them through interest rates of around 6-7 per cent."We could be back having to rent and going through the rental system all over again, which isn't really an enjoyable place to be." Experts estimate almost 300,000 borrowers who took out home loans in the two years to May are at serious risk of default or forced sales.
"It's very bad, especially in the emerging communities, because of lack of financial literacy," Mr Weldemariam says."They come and knock on our office, and they say, 'What is my future? Is my bank going to take the property?'"Mr Weldemariam's clients were too worried about their financial situation to go on the record.
"We talk about their budget, about disposable income, about their repayments, and if it's getting tighter, we advise them to sell it."
good luck finding somewhere apparently the rents r so high and not enuff properties to rent
The first question people in this position must ask is, what is Albo doing to alleviate this precarious position
Those who borrowed above their means and complaining are the same ones that try to sue McDonald for being fat!
Or they could use whatever is left after the sale and buy in the regions, I mean buy outright.
Thrust not thy government or their minions.
You need an example for your scaremongering & you pick a bloke who was able to get a loan for 1.3 mill for a a 3 bedder in Drummoyne 🤷♂️🤦♂️🤦♂️Are you F…Serious 🤬🤬🤬🤬
Don’t worry, it’s all for your benefit as average Aussies!! The billionaires and the million dollar salaryman at the RBA said so so you know it’s true…
What that tells me is someone overcapitalise. Rates were always going to go back up. If you didn't allow for that when taking out your mortgage you're a fool
Perhaps NSW Premier Dominic Perrottet having too make it Law in NSW that rental advertisements aren't auctions is a wake up call that there's a massive speculation problem in Australia's real estate market? Once people are working so their kids might own something there's a prob.
Stop drinking your soy lattes & spending 🤑 on useless electric vehicles & perhaps u might b able to afford your mortgage - I had a mortgage in the 90’s when interest rates hit 19%
Don’t buy what you can’t afford.
The issue in this country is the state of disrepair that many renters find in the houses/apartments they live in. Until the Govt enforces a minimum standards compliance from landlords & developers, renting will always be difficult for many.
Answer is simple. Don’t have kids if that is what will make your mortgage unaffordable. Or sell, and move somewhere you can afford to do both. People can’t have everything.
And a Labor govt determined to stick with subsidies, incentives, tax breaks, benefits for property investors, but doing ZERO for affordable housing ( except some tinkering around the edges) or renters.
$850,000 for a first home is maddness. I blame this country for letting prices get so ridiculous
Said like renting is a BAD thing
We tried to warn all of you. auspol
It won’t be easy under Albanese
Yeh, great idea to print money and burn it on masks, covid tests, people to sit at home for a virus with an incredibly high survival rate. It was never going to come back and bite us... And it's for reasons like this we need smaller and less intrusive governments.
All by design Get people in with low interests rates and first buyer schemes Allow people to borrow to much, create a bubble in the market place . you will own nothing and be happy (WEF)
They want to have a kid as well. Ffs. Then you complain u have no money. Get your wife working and both take second jobs
Wait till the owners have to remove all the gas lines and utilities and, they will need to increase rents to get this money back because the government will not be paying for it all.
Wait until they hit 17%.
Everything goes up under AustralianLabor
Part of the plan from the WEF. People need to wake up to this planned and sinister agenda rolling out around the world.
$850k loan for a first home? Faaaaaaaark
You will own nothing and you will be happy
If you can’t afford a mortgage at 2-6% rates. You’ve over borrowed you’ve lived beyond your means and you can’t budget. In 1988 we had 19% interest rates. So toughen up you sooks.
Labor wanted more Gov spending during Covid. If they had been in power interest rates would be now much higher.
labor has done nothing for the average person. If you are an illegal immigrant, indigenous, public servant, union, o/s country, terrorist or renewables rent seeker, you'd be delirious. Meanwhile the punter can't fill their cars, buy food, pay their mortgage or power bills
You only have AlboMP to blame.
850K Mortgage with partner on Jobkeeper and historical low %. Zero common sense and yet it is someone else's fault. People need to own their Decisions, good or bad.
If you can’t afford a mortgage you might not be able to afford the rent!
How did they get loans if they could not proove ability to service them at interest rates less than 7%?
I think they'll be fine...
Many will never experience the luxury of home ownership at all...
2nd job in hospitality, Easy
That is the whole idea: stop folk from spending
In the 90’s under Labor we paid 17% interest. People need to ensure they are not living above their means. The bank said we could borrow $2m in the 21’s .. we borrowed 480k and fixed it in 2022 at 1.98% .. people need to be smarter
Thanks Albo.
Good.
They took an 850k loan with record low interest rates. Now wondering how they will pay mortgage when off low fixed rate and wanting to start a family.... Why not have bought something you could actually afford?
Rates will drop from November next year. I'm betting the house on it. By that time rate rises would have cost me an additional $19500. Not the end of the world, folks
Keep those rate hikes coming, collapse the housing bubble.
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