Money.com.au commissioned a survey of an independent panel of 1018 Australian mortgage holders to gauge how financially prepared Australians are for a new environment of higher interest rates and the rising cost of living. Respondents were asked whether they would restructure their home loan in any way and how they plan to do so, including fixing the rate on their loan, refinancing, renting out their home or even selling their home.
The pool of survey respondents matches the geographical spread of the Australian population.
Half (51 per cent) of respondents said that they would make changes to their home loan to cope with a rate rise.
Among those who will make changes:
The 49 per cent of respondents who will not act may have already refinanced or fixed their home loan interest rate.
Among this 51 per cent, a higher proportion of mortgage holders in each State will fix the interest rate on their whole loan amount, rather than part of their loans. Specifically:
In contrast, half the proportion of South Australians (24 per cent) will fix the rate on part of their loan.
More West Australians (31 per cent) than borrowers in other States will fix part of their loan.
A higher proportion of ACT mortgagors who will act (43 per cent) will refinance, compared with 28 per cent of West Australians and just 18 per cent of South Australians.
West Australians are more likely to sell their homes, with
Money.com.au also looked for age-based trends. It found that a higher proportion of over-50s will not be making changes to cope with a rate rise, at 69 per cent.
This suggests older Australians already have substantial saving buffers to keep up with higher loan repayments.
They may also be more financially savvy, making changes to their home loans earlier in the year in anticipation of a rate rise, while other older Australians may be close to paying off their entire loans altogether.
A greater proportion of younger respondents revealed they would be making changes to their home loan, with
Younger Australians are more likely to have longer-term loans and higher repayments to contend with than with their older counterparts.
A third (34 per cent) of 18-50-year-olds who will make changes revealed they will refinance to cope with a rate rise, compared with 28 per cent of over-50s.