Mortgage Stress, Are You Feeling It More than Same Time Last Year?

Frankensnore on 12/03/2024 - 09:50
Last edited 12/03/2024 - 09:52

According to news that I read (can’t find the link anymore, i think its from apple news) the number of people requesting Financial Assistance to their bank has almost doubled from last year. Last year rate is approximately 0.25% cheaper than today.

Compared to March 2022 and 2023, where the rate difference is 3.5%, the number of people requesting Financial Assistance has only increased by 30-40%.

Are you feeling the mortgage stress now?

I understand in ozbargain similar poll existed in Nov or so. But news said the dramatic increase only started in last December.

Poll Options expired

  • 47
    Yes, and also considering to sell my property.
  • 298
    Yes, I feel it much more than last year, but I will keep my property.
  • 422
    No, I am about the same stress as last year.
  • 71
    Yes, I am renting but felt the increased stress.
  • 81
    No, I am renting and not feeling more stress.
Financial Home Loan

Comments

        • tomfool on 14/03/2024 - 09:56
          +3

          You can blame negative gearing for this, but the real blame is increased demand created by excessive immigration. More people in than houses built equals demand equals prices increases equals more investors chasing returns equals more demand.

          If supply side was increased and demand reduced prices would stabilise and capital gains returns would be reduced. If it was simply just a negatice gearing problem then there would not be a problem with rent prices, excess vacant rentals = lanlords competing for renters.

          The blame is with successive governments opening the gates before the market has caught up, and the current goverment doubled down on this in the last couple of years.

      • us3rnam3tak3n on 15/03/2024 - 11:22

        An exodus from Sydney or Melbourne would see values tumble. Could happen with WFH or FIFO options.

    • rickdwp on 14/03/2024 - 13:13
      +1

      The whole "Back in my day we had 17%" is just nonsense. Yeah 17% but conveniently leave out the fact that even at 17% the average mortgage was still less of a household income (which back then was usually single income) then the 6% sucks out of a household budget today.

      You can say "Oh people borrowed to much" but that is just victim blaming pure and simple, especially in a country that treats tenants like boxing bag peasants.

    • Nebargains on 14/03/2024 - 15:10

      The RBA raises interest rates to tackle inflation, not property prices. Given inflation seems to be not far beyond the target band, suggesting that they have a way to go because of property prices is ridiculous. You better get on the phone to all the central banks because it seems that most central banks are discussing the possibility of reducing rates, not increasing them. 17% will never be seen again.

  • FoxJump on 12/03/2024 - 11:48
    +10

    Yes. i no longer buy Lego
    I buy aliexpress blocks.

    Sad days ahead.

    • Ozbar Gain on 12/03/2024 - 12:09
      +4

      Are the compatible with Lego?

      • FoxJump on 12/03/2024 - 13:23
        +3

        yeah. ive bought lego compatible train tracks, blocks, wheels (one set was shit so i got a refund !), double sided base plates, etc.

    • dmcneice on 14/03/2024 - 10:19

      pre-pandemic we used to buy most of the good lego sets. Since interest rate rises, we havent been able to afford it anymore. Sad times indeed.

      • spc12go on 14/03/2024 - 19:24

        First world problem

  • Jimothy Wongingtons on 12/03/2024 - 12:06
    +11

    That’s my secret cap. Im always stressed

  • onetwothreefour on 12/03/2024 - 12:20
    +6

    Paid off the mortgage last year so no stress for me.

  • nomoneynoproblems on 12/03/2024 - 12:22

    I settled last December. I don’t know what sub 5% feels like, but I’m sure it’s good.

    • netjock on 12/03/2024 - 13:14

      It feels good when you can just afford the repayments. It is now when you feel the hurt.

    • JimB on 12/03/2024 - 14:33

      It was great while it lasted.

      Unfortunately some people thought <4% would last forever.

      • WhyAmICommenting on 13/03/2024 - 17:54
        +1

        RBA made it sound like it would be a long while at least.

        • netjock on 14/03/2024 - 14:06
          +1

          The RBA probably have many PhDs working for them and they get it wrong.

          What hope is there for everyone else. I took them as bluff and on 2% until 2025. Got some 1.84% until 2027 but I am not going to be walking around with a placard saying I'm some investment genius because I played chicken with the central bank and the banks. Rates could have gone negative far as I know like in Denmark after the GFC.

  • star-ggg on 12/03/2024 - 13:40
    +19

    Prefer the mortgage stress to rental stress. At least I'm paying off my asset.

    • WhyAmICommenting on 13/03/2024 - 17:56

      It is a fantastic way of forced saving. If I was putting that much in shares it would be tempting to keep dipping into it before it’s locked in.

      • star-ggg on 14/03/2024 - 07:21

        It's more you have to live somewhere so your only options are to rent or buy. Renting is just as stressful financially as buying then you have all the non-financial stress of being a tenant.

  • Drpepper666 on 12/03/2024 - 13:51
    +1

    I just raised the rent on my IPs, not a problem.

    • JimB on 12/03/2024 - 14:34
      +1

      Even if I raised the rent by 40%, I'm worse off than when interest rates were 3.xx%.

      • infinite on 13/03/2024 - 19:33
        -2

        Raise it more then.

  • payless69 on 12/03/2024 - 14:01
    +1

    Albo is going to wave tariffs on tampons etc…

    • Dollar General on 12/03/2024 - 14:43
      +1

      How much $ will you save now?

    • Muzeeb on 12/03/2024 - 14:51
      +12

      About bloody time.

      • montorola on 13/03/2024 - 13:13
        +7

        Just go with the flow mate

    • OzzyOzbourne on 13/03/2024 - 23:09
      +2

      I thought Dan was installing free tampon machines on every street corner, not seen a single one yet 😡

  • curtturtle on 12/03/2024 - 15:45

    I am making almost double what I was 18 months ago and yet my bank account doesn't go up.

    • WhyAmICommenting on 13/03/2024 - 17:57

      Nice pay rise? Not nice mortgage rise.

      • curtturtle on 14/03/2024 - 12:40
        +1

        New Job that paid almost double and a pay rise in the new job. Mortgage went up almost as much and then the cost of groceries and so on. I also got my shit together and lost 30kgs, but to do that my groceries are much more expensive as it is cheaper to eat shit rather than healthier. I think I am paying almost $1500 a month more on my mortgage.

        • curtturtle on 14/03/2024 - 12:42

          Correction $1024 more a month

  • echelon6 on 12/03/2024 - 17:20
    +5

    My peak fear was late 2022 because back then there was no end in sight. I felt it was possible the RBA could go to 5%, 6%, 7% etc.

    Now, yield curves show no chance of that happening. My cashflow is bad but I sleep well at night.

    • elgrande on 12/03/2024 - 18:19

      What % of disposable income, if you don't mind revealing?

      • echelon6 on 13/03/2024 - 16:34
        +3

        lol I got 4.5m in debt, net of offset

        my debt load is close to 100% of my passive income at current rates

        RBA made me go back to work

        • WhyAmICommenting on 13/03/2024 - 17:58
          +2

          I’m impressed you can sleep with all that!

          • amazonaddict on 14/03/2024 - 11:29
            +1

            @WhyAmICommenting: He makes $30K/m without working. Worse come to worse, he will sell one of those debts for loss and sleep like a baby.

  • affable on 13/03/2024 - 10:01
    +4

    Sudden mortgage stress for some is that the COVID 1.99% fixed loans are now rolling over to variable. If you didn't buffer the win, you'll be facing a brick wall.

    • wuds on 14/03/2024 - 14:50

      Exactly what's happening now

  • Herbse on 13/03/2024 - 10:28

    Have to start buying Coles brand Nutella = Aussies struggling

    • michaelTito on 13/03/2024 - 13:53

      they taste so bad compare to the real thing

      • Herbse on 13/03/2024 - 13:55

        Funny thing is I actually prefer the aldi brand one compared to Nutella brand.

        • michaelTito on 13/03/2024 - 16:10
          +1

          Never had it. I’m going to give it ago. If it’s bad I’m private messaging you for a refund

    • infinite on 13/03/2024 - 19:31

      The Aldi brand Nutella tastes better than original Nutella, IMO.

  • gromit on 13/03/2024 - 10:28

    where is the "NO, stress is less and rate hikes have stopped". This time last year I had far more mortgage stress as house build starts this year and if the rates kept going combined with a high inflation rate then it would impact my build. But the rates didn't go too high and are still relatively low and look to be staying that way or perhaps even reducing.

  • Cluster on 13/03/2024 - 12:07
    +2

    My mortgage reset from 1.75% to 6.19% this week. Ouch. I am however prepared for it and stacked away a healthy repayment buffer over the last year. My lender implemented a rather aggressive repayment schedule during the 3 year fixed rate, so my fortnightly repayments have barely budged upward even though the rate has rocketed up.

    1.75% saved me a bucket load of money from 2022 onward. The only pity is I could have locked in 2.49% for 5 years, and be sitting on that for another 2, but oh well.

    • PaperplaneXXX on 13/03/2024 - 12:37
      +1

      HSBC offered 2.67 for 5 years. I took 2.09 for 3 instead ohhhhh

      • Hansi on 13/03/2024 - 23:10
        +2

        Consider yourself lucky! I wanted to fix for 2 yrs at 1,99%, but the customer service person at my bank had trouble with my loan and couldn't organise to fix it. After a few weeks of talking to him I had enough and stayed on the (close enough) variable of 2,05%, thinking it wouldn't matter - this was Feb 2022…..

  • eek on 13/03/2024 - 12:22

    Same amount of stress - 2 young kids, single income household, mortgage payments are $8000+ per month including rentals, which are slightly negatively geared. Looking to take on more debt to buy another property before interest rates stabilize - will likely see another jump in real estate prices when it becomes cheaper to borrow money again.

  • infinite on 13/03/2024 - 12:33
    +1

    Poll needs to have an option added to it:

    • No, I have investment properties, the tenants are paying for the rate hikes.
    • Frankensnore on 13/03/2024 - 13:06
      -2

      I don't agree with this. It is just not enough homes. Too few supply.

      Owners can't just pass on the rate if enough supply tenant just leave. But tenant now can't leave to cheaper place.

      • gromit on 13/03/2024 - 13:11
        +1

        Tenants just pay market rates. Realistically they aren't paying for the rate hike, his profit margin is paying for the rate hike.

      • infinite on 13/03/2024 - 19:28
        -5

        Tenants literally absorb every last cent of every interest rate hike to your mortgage rates.

        For every tenant who can't afford to pay for those increases caused by our current federal government and leave at the end of their lease, you'll have 150 people lined up competing to pay the new raised rent amount when they leave. There's no cost I directly incur due to that. Tenants foot every cent of that cost via their weekly rent and projected cost hikes from the coming year due to the current governments complete financial and economic incompetence are built in to that rent cost, too.

        • Frankensnore on 13/03/2024 - 19:40

          I don't agree, not all investors have home loan.

          Passing some costs to tenant is true, but if demand is the same, there will be property which owner desperate enough to keep rent low to attract quality tenants.

          I think only 10% of the rent price is due to interest rate.

          When interest rate drop as predicted, rent is unlikely to drop much as well.

          • infinite on 13/03/2024 - 20:59
            -7

            @Frankensnore: Demand is always high & the current government are never going to do anything to help those who wish to remain renters, because they only implement policies and take actions that cause rising costs for investment owners - who in turn shift 100% of those cost increases immediately on to tenants. It's not a theory or opinion, it's literally what we do. Property investors don't need to pay for the economic vandalism of the current government, that's something those who voted these clowns into power will have to do.

            • Frankensnore on 14/03/2024 - 01:29
              +2

              @infinite: Literally everything you said here is infinite lack of knowledge of how economy law works

              • infinite on 14/03/2024 - 16:35
                -1

                @Frankensnore: It's literally exactly what we do as property investors.

                Your spouting nonsense and have clearly never owned an investment property.

                • gromit on 14/03/2024 - 17:06

                  @infinite: That is completely inaccurate. You rent your property at market rates, whether you own it outright or are mortgaged up to the eyeballs has no impact on market rates for a property which are based on rental availability, The property and peoples ability to pay.

                  The situation in recent years has been very fortunate for property investors thankfully. The tight availability and immigration has meant rents are going up while rates go up, however the two are not connected, you could just as easily have the situation of rents going down while rates went up if we didn't have such a tight market with extreme immigration.

                  • infinite on 14/03/2024 - 21:51
                    -1

                    @gromit: Seems pretty bizarre for you to be pushing a theory you have, compared to what I and others as property Investors are actually doing. Your spouting complete nonsense in the face of actual investment property owners telling you exactly how it is and how it works.

                    You guys can tantrum and thump your hand on the ground screeching about how you imagine it works all day long, what I've said is literally how we do it though.

                    • gromit on 14/03/2024 - 22:27

                      @infinite: theory lol, no it is from 30 years of property investment. What you get from rent is completely unrelated to interest rates. Or are you suggesting you increased rent for 13 months straight regardless of what others were charging? and will then be decreasing rent when rates are going down regardless of what the market is doing. The reality is you charge the maximum people are willing to pay, at least I always have, charging less because interest rates are down would be moronic and charging more is impractical as no one will rent from you.

                    • tomfool on 15/03/2024 - 09:57

                      @infinite: sorry you are just wrong, the only reason you are able to pass on any costs is due to demand. Remove demand and you will drop you rent ask until you get a tenant, very simple economics supply and demand. At the moment you are the price setter thanks to immigration.

                      You are fortunate that an iressposiible governement doubled down on immigration and stoked supply side. Add to that a number of natural disasters that diverted labour away from new builds and you have a perfect storm of housing shortages driving up returns.

                      Hyothetical, next month reserve bank drops rates by 1%, are you going to reduce your rent ask? No you are not, you are likley going to increase if the market is still climbing.

                      • infinite on 15/03/2024 - 12:21
                        -1

                        @tomfool: Your wrong, your wrong, reeeeeee………….

                        It's literally what we do mate, regardless of if you like it or not.

                        • gromit on 15/03/2024 - 13:32

                          @infinite: You obviously do not have any investment properties, or if you do it is scary you could be so ignorant of how the market actually works.

                          • infinite on 15/03/2024 - 14:54
                            -1

                            @gromit: You can live with your head in the sand as long as you like mate, the fortnightly rent payments from my tenants will continue to keep hitting my account regardless.

                        • tomfool on 15/03/2024 - 14:25

                          @infinite: keep telling yourself that. The only reason you appear right is that the current market has made your assertion correct. If there was a glut of rentals and rates were increasing youd take whatever the market offered or you would sell.

                          I take it by your reasoning you'll be dropping your rent ask as soon as the rates drop?

                          • infinite on 15/03/2024 - 14:52
                            -3

                            @tomfool:

                            keep telling yourself that. The only reason you appear right is that the current market has made your assertion correct.

                            Hahahahaha, LOL, I'm right because the market I'm a part of acts exactly as I act and as I told you we act………… I'm glad you finally acknowledged that.

  • PaperplaneXXX on 13/03/2024 - 12:36
    +1

    NO and I am buying more))))

  • nobro25 on 13/03/2024 - 12:49
    +5

    I outsource my mortgage… Let someone else do the work.

  • Trekky on 13/03/2024 - 15:55
    +2

    "Don't have a Mortgage" should also be added…

  • weee on 13/03/2024 - 19:18
    +1

    I'm optimistic, looking forward to the day of mass migration to Mars, that way might alleviate the mortgage stress on earth a little bit

  • Imightnotbearobot on 13/03/2024 - 20:23

    Your poll is not working

    • infinite on 13/03/2024 - 21:24

      There is a poll option not to show results until after a set number of days/weeks, they may have done that.

  • xsacha on 13/03/2024 - 20:34

    Less stress than last year because I am further along? Wasn't an option on poll.

  • bargainhunter168 on 14/03/2024 - 08:04
    +3

    I'm in a much better financial position than last year due to Bitcoin and the crypto bull market, my wealth has increased significantly to a point where I can repay the entire mortgage when I sell my crypto portfolio, so I'm very happy. Zero stress at all.

    • PaperplaneXXX on 14/03/2024 - 09:56

      well done!!!

    • Wasabi Ninja on 14/03/2024 - 10:54
      +1

      Sell and pay those sweet capital gains. Paying tax means you are making money $$$$

      • bargainhunter168 on 14/03/2024 - 11:59
        +1

        Yep, I will definitely sell some to pay off my mortgage this cycle, but I will continue to hodl and buy more Bitcoin in the next bear market.

        Happy to pay CGT, it means I've made profits.

    • umoddbro on 14/03/2024 - 19:33
      +1

      Nice you made money gambling, I wonder what wouldve happened if it was the other way around…

      • bargainhunter168 on 15/03/2024 - 10:20
        -1

        First, investing is not gambling. By your logic, all these property investors were also gambling and what would've happened if it "was the other way around"..? Actually we already know, these property gamblers will try to sue the bank, lmao, https://www.dailymail.co.uk/news/article-6727375/Westpac-ban…

        As for me, I invested (not gamble) with money I can lose, so if it went "the other way around" as in Bitcoin went to $0, I would have lost my original investment, but I can never go negative, unlike property investing. When it goes "the other way around" for property, not only will you lose your deposit, you can also owe the bank and have no property at the end, that's how leverage works, some food for thought.

        For me to "lose everything", Bitcoin needs to go to $0, which is highly highly unlikely.

        • cloudy on 15/03/2024 - 20:07
          -1

          that's how leverage works, some food for thought.

          Sounds like you are having a go at those who borrow to buy property…

          But at the same time admit you have borrowed to buy property…

          • bargainhunter168 on 16/03/2024 - 17:23

            @cloudy: Nope, not having a go at anyone, just stating facts. You can perceive them whichever way you wish.

  • dmcneice on 14/03/2024 - 10:23
    +2

    I was more stressed last year, because I didnt know how high it could go. I started working Saturdays and that helped. Now the current consensus is that it has probably peaked. Our mortgage is $7200/month, which is about 65% of income. It's rough but we are surviving and can continue to do so provided it doesnt continue to climb.

  • Wasabi Ninja on 14/03/2024 - 10:53
    -3

    If you’re doing it tough, you’re doing life wrong.

    • Cluster on 14/03/2024 - 12:46
      +2

      Sometimes life hits you on the head with bad luck. A relative suddenly suffered deep and debilitating mental health issues that prevented him working and servicing the mortgage.

      • nobro25 on 14/03/2024 - 19:47

        Easy Wife, Easy Life.

  • amazonaddict on 14/03/2024 - 11:39

    Few years back, a lot of South Asian IT folks who were on Contract jobs raking in big moola fought for properties in Western Sydney. They would sell their Kidney to get inside a Good School's catchment area. But, now the Contract Scene is a bit dry. Their income almost halved. I know a few of them are struggling, but somehow managing either by renting rooms or taking up night jobs.

  • Ben Newton on 14/03/2024 - 13:26

    no stress

    mortgage paid off on 1.5m house bought at 660k

    currently living in Asia at 35yo and collecting rent on it and other investments so life is pretty sweet :)

    • Trying2SaveABuck on 15/03/2024 - 03:10

      Depends where you live in Asia

      If your rocking Thailand or Bail etc would be great

      If youre in Palistine or Afghanistan etc not so great

      • Ben Newton on 15/03/2024 - 12:04
        +1

        yes im in south east asia :)

  • ankor on 14/03/2024 - 14:39

    Yes, but my wage has kept up with everything and there is a bit of a buffer still, so all good.

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