The higher cost of living is having a negative impact on Australians, with one in four reporting some form of mortgage stress.
According to Genworth’s latest Homebuyer Confidence Index, mortgage stress has increased from 21 per cent in March 2011 to 25 per cent.
RFi director Alan Shields told Real Estate Business that borrowers were struggling under the rising cost of petrol, electricity and groceries.
“The general cost of living has increased dramatically over the past few years and this is impacting borrower confidence. In addition, at the time of this study, the carbon tax was also playing upon people’s minds,” he said.
Interestingly, while the number of Australians reporting mortgage stress has increased in the last six months, the Index also found that the number of people overpaying their mortgage has also increased, with 41 per cent of borrowers admitting to “overpaying their mortgage" within the past 12 months.
“This shows just how cautious borrowers are these days,” Genworth chief executive officer Ellie Comerford said.
“If people have the money to pay their mortgage down now they will do so because they don’t know what tomorrow will bring.”