'Most Aussies meeting mortgages'

MORTGAGE stress is on the rise, but two-thirds of households are coping easily with their increased home loan payments by adjusting their lifestyles, a survey has found.

'Majority meeting mortgages'

MORTGAGE stress is on the rise, but two-thirds of households are coping easily with their increased home loan payments by adjusting their lifestyles, a survey has found.

The latest Mortgage and Finance Association of Australia (MFAA)/BankWest Home Finance Index also found that people living in rural and regional areas are more likely to be struggling to meet their mortgage repayments than their capital city counterparts.

The survey of 802 respondents found a total of 29.3 per cent of those living in Australian capital cities are struggling with their loan repayments, increasing to 39.8 per cent of respondents living in regional centres or rural areas.

"Even though people in country areas said they are struggling more, the statistics also show that people living in capital cities are more likely to be paying a greater percentage of their take-home household income on their mortgage repayments," MFAA CEO Phil Naylor said.

On a national level, while most survey respondents across Australia said they were easily meeting their loan obligations, around 31 per cent are struggling to meet repayments.

Of these, 0.5 per cent of respondents were one to three months behind on payments, representing just 27,000 loans out of a possible 5.5 million across the country.

The survey also showed that the proportion of respondents who said their financial situation was worse than 12 months ago has doubled from 18.3 per cent to 35.2 per cent

The proportion who said their situation was much worse has trebled to reach 12.6 per cent.

Average mortgage rates are at a 12-year high of around 9.5 per cent following 12 official rate increases since 2002 by the Reserve Bank of Australia, and several independent rate rises by retail banks this year.

"While the number of Australians experiencing some stress is on the rise, the survey reveals two-thirds of borrowers Australia-wide are easily meeting repayments," BankWest head of mortgages and savings Paul Vivian said.

He said this showed the majority of Australians had been able to make lifestyle adjustments to help them make ends meet.

"They are eating out less, reducing costs at home, taking their lunch to work and buying food from bulk or lower cost outlets.

"These are all sensible adjustments in response to increases in interest rates to ensure they manage their repayments."