Interest rates are dropping, so it would be fair to presume that mortgage stress rates are too, right?
In reality, mortgage stress continues to rise among Australian homeowners. All homeowners, both owner-occupiers and investors, can reduce mortgage stress by understanding the full picture before making the purchase.
What is mortgage stress?
Mortgage stress doesn’t have a concrete definition, but it’s commonly described as paying more than 30 per cent of a household’s income in mortgage-related costs. Unfortunately, it often causes a ripple effect to other areas of a homeowner’s life such as struggling to pay utilities on time, credit card repayments and other everyday essentials.
A mortgage often lasts over 20 years. Interest rates and a homeowner’s personal circumstances will go through many changes over this length of time, which can contribute to increasing mortgage stress.
The scale of mortgage stress in Australia
A recent study from Digital Finance Analytics (DFA) reported that mortgage stress has pushed even higher in 2020. The results revealed that mortgage stress is a very real issue in Australia with one in three households, or 1.1 million, currently feeling the pressure.
While personal circumstances can change suddenly, one of the key reasons for mortgage stress is present at the very beginning. Not having a full picture of the type of costs of owning the property is a common misstep that can creep up on homeowners.
There are so many costs involved with buying a property and if they aren’t totally understood, the homeowner can find themselves in a stressful situation.
PropCalc: The secret to avoiding mortgage stress
Research is key to setting yourself up for a stress-free property purchase. Helping many householders reduce the risk of future mortgage stress, PropCalc shows the real costs of owning the property, before you even make an offer.
Forgetting to factor in all the costs involved with owning a property can result in mortgage stress down the track. PropCalc helps you grasp a realistic breakdown of the costs of owning the property and how it will impact your cash flow. PropCalc accounts for a range of expenses beyond the initial purchase including interest, stamp duty, insurances, council rates and maintenance costs.
If you’re a property investor, PropCalc can be your go-to tool to ensure you get the best property for your portfolio. The tool includes many features to help you understand what type of cashflow you can expect, from the rental income to any depreciation claims available.
PropCalc is your essential property research tool that does so much more than a mortgage calculator. To help you find the perfect property for your budget, PropCalc generates property reports to allow you to save and compare multiple properties online and through the app.
Start using PropCalc today
PropCalc is a free tool that is available through the BMT website. The platform gives you access to depreciation information, insurance, market analysis and property tools at your fingertips.
To join more than 120,000 people enjoying the benefits of PropCalc, visit bmtqs.com.au/propcalc today.