Some are cutting costs, preparing a savings buffer, and finding other income sources
A growing number of Australian mortgage holders are concerned about rising interest rates, with the majority of them taking positive action to mitigate the financial impact, new AMP research showed.
The online survey of 1,000 respondents found that 69% of homeowners will be worried about their mortgage repayments if interest rates rise further, up 5% compared to October 2022.
To account for higher interest rates, 83% have built a savings buffer while 71% have made changes to their household budgets (up from 58% in October 2022). Some 54%, meanwhile, found ways to supplement their cash flow and income to increase their savings buffers, with 74% of these respondents saying such moves have helped improve their sense of financial wellbeing.
Noting the highest impacts were people with children and those under 44, with 79% of these groups having adjusted their household budgets, compared to the national average of 71%, the AMP research showed.
Findings also showed that only 45% of mortgage holders were confident that their current rate was competitive, and that 49% were considering refinancing next year.
With many Australian homeowners rolling off fixed home loans in the months ahead, 62% of those with a fixed component to their mortgage said they are now gearing up for the end of their fixed rate term, as 96% expected interest rates to further rise.
“In a period of higher cost of living, it’s no surprise that mortgage holders are finding more creative ways to improve their household budgets, including finding a way to create a savings buffer,” said Sean O’Malley (pictured above), AMP Bank group executive. “While rising interest rates and higher costs of living are challenging, it’s a positive sign that Australians are taking action to improve their financial wellbeing. Steps like reviewing cash flow, setting a budget, and regularly shopping around for a more competitive interest rate offer are practical ways to help reduce financial stress.”
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