Australians living in rural and regional areas are more likely to be struggling to meet their mortgage repayments than their capital city counterparts, according to the findings of the latest Mortgage & Finance Association of Australia (MFAA)/BankWest Home Finance Index.
The index shows that there is a significant association between where people live and how much they struggle with mortgage repayments, said Phil Naylor, CEO of the MFAA, and reveals that a bigger proportion of people in rural and regional areas are having trouble with their loans than people in our cities.
A total of 29.3% of respondents who live in the capital city of their state or territory are struggling with their loan repayments, while 39.8% of respondents living in regional centres or rural areas are doing it tough.
“Even though people in country areas said they’re struggling more, the statistics also show that people living in capital cities are more likely to be paying a greater percentage of their take home household income on their mortgage repayments,” said Naylor.
On a national level, while most survey respondents across Australia said they were easily meeting their loan obligations, around 31% are struggling to meet repayments, and 0.5% of respondents were one to three months behind on payments. This represents only 27,000 loans out of a possible 5.5 million across the country.
The MFAA/BankWest Survey also showed that the proportion of respondents who said their financial situation was “worse” than 12 months ago has doubled from 18.3% to 35.2%, and the proportion who said their situation was “much worse” has trebled to 12.6%.
Paul Vivian, head of Mortgages and Savings at BankWest said the positive outcome from the survey was the revelation that two-thirds of borrowers Australia-wide are easily meeting repayments.
“This shows [that] the majority of Australians have been able to make lifestyle adjustments to help them make ends meet,” he said.
“They’re eating out less, reducing costs at home, taking their lunch to work and buying food from bulk or lower cost outlets. These are all sensible adjustments in response to increases in interest rates to ensure they manage their repayments.”
