Following the Reserve Bank of Australia’s (RBA) decision to increase the official cash rate for the fifth consecutive month, Mark Bouris joined Domain’s national editor, Alex Stolz, on Channel 9’s Today Show.

You can catch the entire segment below, where Bouris and Stolz discuss the impacts of the latest rate rise on Australian homeowners, tips for those looking to purchase a home in the current market and tips for those concerned about their increasing mortgage repayments.

How many more rate rises?

No one is certain of how many more rate rises Australians will have to endure, but it’s a question that keeps getting asked, simply because of the mortgage pressure Australian households are facing.

On an average $750,000 home loan, your mortgage repayments would have increased nearly $1000 per month, after tax, since this week’s rate rise.

If some predictions come true, and the RBA decides to raise the cash rate to 2.60% leading into Christmas, homeowners could be paying almost $1200 more on an average $750,000 home loan.

That’s a substantial hit to the back pocket of many Australians who are having to also manage inflationary pressures and a rising cost of living.

Stolz said, “I think at the beginning of these rate rises in May, people were saying $100 here or there, I can probably manage it. But now that we’re getting into new territory, where people are going to start to feel that pinch in every part of their life.”

Tips for Buyers

Despite the general concern about mortgage repayments, there are still plenty of Australians looking to buy a home. Stolz provided some useful tips for buyers in this complicated property market:

• Feel empowered: “We need to ensure buyers feel empowered. We’re heading into the spring selling season, so there are going to be more properties on the market. We also know that with rising interest rates, house prices tend to soften, so if you’re buying and selling in the same market, you may well be selling for less than what you would have a year ago but you’ll also be able to buy for less.
• Don’t purchase out of fear: “I think it’s really important that buyers get rid of this feeling of fear. For years we’ve seen a lot of ‘FOMO’ where people have bought because of a fear of missing out. Now we have people being fearful of overpaying.”
• Track property trends: “I think it’s really important to do your research, look at what is happening in the market around you and with certain property types.” Stolz said to look at property data from as recently as three months ago, rather than analysing property data from over a year ago. If you do your research, says Stolz, “you’ll feel quite empowered by that knowledge of what you should be offering when it comes to buying.”

Struggling with mortgage repayments

If your stress levels are rising due to concern about rapidly increasing mortgage repayments, Bouris said there are some options to help alleviate some of the pain of rising interest rates:

“If you’re really in distress, contact your lender and seek an abatement for three months. Most home loan contracts allow you to ask your lender to give you an abatement, or in other words, you make no repayments for three months, but you’re going to have to prove to your lender that you’re in distress due to your financial situation.”

If you’re managing your repayments, but you’re starting to get nervous about future rate rises, Mark said, “What you have to do is go to a mortgage broker and ask, ‘how can I get a better rate?’ This is about rate hunting right now.”

“Rate hunting is really important.”

Three questions to ask yourself when ‘Rate Hunting’

1. What is my current interest rate? Mark pointed out that, “Most people don’t know their interest rate is within three months of settling their home loan.”
2. How does my interest rate compare to the most competitive rates in the marketplace?
3. How can I reduce my mortgage repayments?

If you ask a YBR mortgage broker any of these questions, Bouris said, “it will cost you nothing and they’ll do all of the work for you” by shopping around from their panel of over 35+ lenders, to calculate if there is a better deal out there for you.

When it comes to your mortgage repayments, the most important thing is to not sell yourself short by sitting on your hands and doing nothing. Contact us today to be put in touch with an experienced and trusted home loan expert who can help guide you through this difficult period.