Home loan customers admit they are struggling each month

WITH interest rates at record lows home loan customers are still struggling to meet repayments and reveal why they don’t change loans.

HOME loan customers are under mortgage stress and many say they are struggling to meet their monthly repayments despite interest rates remaining at record lows.

Complacency also remains rife among customers — despite two recent interest rate drops in May and August — new data shows when there is a fall most home loan customers fail to take any action.

Galaxy Research commissioned by financial comparison website iSelect quizzed borrowers following the RBA cut in May — to a historic low of 1.75 per cent — and found seven of 10 customers admitted they had experienced mortgage stress in meeting monthly repayments.

RBA AUGUST: CASH RATE CUT TO 1.5 PER CENT

Of these borrowers 30 per cent conceded they didn’t take any action after the May cut because they felt it “would not be worth the effort.”

ISelect spokeswoman Laura Crowden said switching to a loan with a lower interest rate can leave large sums of cash in borrowers’ pockets.

“For a homeowner with a $300,000 mortgage currently paying 4.69 per cent, moving to a lower interest rate of 3.69 per cent could save up to $175 in interest every month,’’ she said.

About one in seven borrowers admitted they found it tough to meet their monthly mortgage repayments.

Many lenders including the big four banks failed to pass on this month’s rate cut in full, many only offering about half of the 0.25 per cent cut and many customers are still waiting for this to become effective.

Consumer finance expert Lisa Montgomery urged borrowers to keep repayments as high as possible to help build up their financial buffers.

Originally published as Home loan customers admit they are struggling each month