Thursday, August 27, 2009

News 13% unprepared for interest rate rises

13% unprepared for interest rate rises, according to poll

With mortgage interest rates at their lowest in almost 50 years, a survey has discovered 47% of homeowners are budgeting for rate rises between now and Christmas following Reserve Bank of Australia indications that interest rates will rise sooner rather than later.
The survey found not everyone is well-prepared for coming interest rate hikes, with 13% of respondents saying they have not factored in an interest rate change, and haven’t really thought about it.

The survey asked, "When are you factoring an interest rate rise into your mortgage?":
  •  Within the next three months - low rates were nice while they lasted - 26%
  • Before Christmas - just in time for the holidays - 21%
  • Early 2010 - a great way to kick off the New Year - 40%
  • I have not factored in a change - to be honest I have not really thought about it - 13% property blogger and author Alex Brooks says, “the RBA’s advance warnings are starting to sink in and it’s great that the majority of consumers are becoming increasingly aware that today’s low rates won’t last forever.”
    RBA Governor Glenn Stevens has made several public comments indicating his concern over property prices rising as our economy strengthens, and has indicated that the current cash rate of 3% is an all-time low that is more likely to move up than down.
    For those of us already living the great Australian dream of owning a home, preparing the household purse strings for the inevitable hikes in interest rates is a must-do.
    Alex Brooks, who has also written a book called Mortgage Stressbusters, says mortgage holders unprepared for rate rises need to take a good look at their household budgets to futureproof themselves from financial problems.
    “There are all kinds of tips and tactics householders can do to make sure that interest rate hikes don’t hurt them,” she says.
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