Thousands of Brisbane households will be forced to tighten their belts even further in the New Year with more people coming off record low fixed-rate mortgages and reverting to variable loans.
Mortgage holders caught up in the hike are being encouraged to get on the front foot and seek advice before they find themselves under financial stress.
Years of record low interest rates, an explosion in house prices borne out of the global pandemic, which saw a stampede of people jump into an inflated housing market and advice from the Reserve Bank of Australia saying that the good times were here to stay, mortgage holders watched with concern as the RBA then ushered through eight straight months of rate rises.
Research from Roy Morgan shows an estimated 1,013,000 mortgage holders (22.6%) were ‘At Risk’ of ‘mortgage stress’ in the three months to October 2022 and that’s not accounting for the two more rate rises we have had since then.
Mortgage holders now face a perfect storm with cost of living pressures increasing, coupled with inflation-adjusted wages that are now at an 11-year low, price of assets falling (house prices) and an end to those once-in-a-generation fixed-term deals and transfer onto variable loans which in some cases could see repayments double.
The highest interest rate in a decade – many young people have never known anything but low rates.
The changed conditions have also seen lenders reduce the amount of money they are willing to lend people looking to get on the housing ladder by almost 20 per cent.
People experiencing severe financial hardship are being encouraged to approach their lenders to discuss options instead of waiting and having their situation worsen.
• Financial stress can feel overwhelming. If your mental health is being affected, please reach out for support. You can access free, confidential counselling 24/7 through Lifeline’s crisis support service on 13 11 14, or by calling Beyond Blue on 1300 224 636 or via online chat and the salvationarmy.org.au
13 SALVOS (13 72 58).
So, what is being done to help people who find themselves in a financial emergency?
A Queensland Government Mortgage Relief Loan provides short-term help to people who are having difficulties with their home loan repayments due to unemployment, accident, illness, or some other unexpected or unforeseen crisis.
The loan is interest free with no application fees or ongoing charges.
You can borrow a maximum of $20,000, which is repayable over 10 years (in addition to your home loan repayments). Repayments start 12 months after you get the loan.
It secures the loan by taking a registered mortgage over your home. This is a legal document that gives a lender enforcement rights against a property to recover a loan.
Note: A mortgage relief loan gives only short-term help. If you’re experiencing long-term financial problems, you should get help from a financial counsellor.
Eligibility for the loan
To be eligible for the loan, you must:
• be in financial hardship and in danger of losing your home.
• be able to demonstrate that you’ve exhausted other avenues of help, including deferring or restructuring loan payments with your current lender.
• be a permanent Queensland resident.
• have enough equity in your home to provide security for the loan.
• have a mortgage of less than $500,000.
• be an owner-occupier wanting to maintain ownership.
• not own or part-own any other real estate.
• be able to demonstrate that the unforeseen change in circumstances must have caused the level of your home loan repayments to exceed 30% of your gross household income.
• have taken all reasonable steps to meet your liabilities, and be able to demonstrate that you’ve been making home loan repayments of more than 30% of your gross household income.
• provide written authorisation for your home lender and other creditors to disclose information about your financial affairs to us. This authority continues until the Mortgage Relief Loan is repaid.
For more information on terms and conditions visit: https://www.qld.gov.au/housing/buying-owning-home/financial-help-concessions/mortgage-relief-loan
Phone: 1300 654 322, Monday–Friday, 8.30am–5.00pm
View on link below:
And visit Queensland Housing Strategy 2017–2027 to see what else is being done to help ease the housing and homelessness crises in Queensland.