According to economists, Australians are more likely than ever to face defaulting on their home loans. Up to 300,000 homeowners could face defaults this year alone.
The main problem behind many of these home loans is the rising cost of interest rates and the large amount of credit card debt that homeowners face. Additionally, home prices in many areas are falling as it becomes harder and harder to sell property here.
In research done by two large financial services firms here, JP Morgan and Fujitsu Consulting, some 750,000 home owners will face some type of mortgage stress in the next few months. This information was quoted by Fairfax Publications. 300,000 of them will default on their loan and may find themselves dealing with repossession.
Credit card debt will pose a large problem for homeowners as some studies show that consumers are spending over three months of disposable income on credit card debt.
The question looms, then, will the Reserve Bank of Australia raise rates yet again, making it even more expensive to own a home and to pay off credit debt? It could, as many economists believe that the rate will be raised 0.25 per cent to 7 per cent when the bank meets on Tuesday. They will likely raise the right here as inflation continues to grow. More so, many lenders believe this won't be the last time these rates are raised this year.