Australian borrowers have felt the pinch of rising interest rates with 77.1 per cent of mortgage holders already experiencing a rate hike, according to a new survey.
Data from Savvy found that 25.7 per cent of those who have had an interest rate jump have seen their repayments rise six per cent – putting more pressure than ever on household budgets.
As a result of higher mortgage repayments, 60.6 per cent of borrowers said they would “spend less” on consumer and other goods and reprioritise the mortgage if rates rise.
Savvy Chief Executive Officer Bill Tsouvalas said Australian’s budgets were stretched.
“The survey results presented here show economics in action – a rise in interest rates means a corresponding downward trend in overall spending,” Mr Tsouvalas said.
“But that is of little comfort to Australians already doing it tough and set to do it tougher as the Reserve Bank of Australia puts the brakes on a little more each month.”
The survey found 18.1 per cent of mortgage holders repayment had risen between six per cent to 10 per cent and 6.26 per cent have had to deal with a climb of 11 per cent to 20 per cent.
At the top end of the scale, 1.34 per cent have reported increases in excess of 21 per cent.
As for corresponding pay increases, 34 per cent of Australians surveyed said their pay had not changed since 2021.
While 26 per cent reported a pay rise of up to five per cent and seven per cent say their wage has gone up between six and 10 per cent.
Mr Tsouvalas said the best thing for those struggling with repayments was to lock in their interest rate.
“Only 26 per cent of mortgage holders in our survey said they’d try and fix their current home loan rate,” he said.
“This should be 100 per cent.
“If you are on a mortgage, the time to lock in a fixed rate or consider refinancing is now.”
“Don’t put it off. This should be your first priority.”
To try and better manage higher borrowing costs, 32 per cent of homeowners said they would rely on savings to fund the increase, with the same proportion stating they would try to increase their income.
