Tuesday, October 25, 2011

What is Mortgage Stress?

Mortgage stress is when a homeowner needs to pay 30% of their income to mortgage repayments. It is not a psychological condition as some may think though the inference is that those having this level of debt would be stressed. A recent report from the University of Canberra has WA at the top of the mortgage stress list with 13% of mortgage holders under "mortgage stress".

With the economy going well, inevitably the Reserve Bank will feel the pressure to increase rates and this percentage will climb. However, a drop in mortgage stress percentage may not necessarily be a good sign. Many under "stress" may simply sell up their houses and go back to renting doesn't indicate an improvement in the situation. Are you in a mortgage and are you a part of this mortgage stress statistic?

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