According to figures from the Australian Bureau of Statistics, 35 per cent of all loans in Western Australia during the month of February were refinances as homeowners grapple with interest rate rises and the higher cost of living.
Mortgage and Finance Association of Australia chief executive Phil Naylor agreed homeowners had to be careful with refinancing. “Seek some good advice to make sure it puts you in a better position,” he said.
Homeowners who refinanced had to change their spending habits to avoid going further into debt.
Fujitsu Consulting analysed data collected from 26,000 Australian households since 2006 and predicted 750,000 households would suffer debt stress by the middle of this year, with almost half of those under severe stress.
These households include young families who have over-extended themselves in order to break into the property market and own their own home. Now they have to cope with a rising rate of inflation which reached 4.2 per cent in the March quarter and is likely to cause further increases in home loan interest rates.
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