Australians Ahead of their Mortgage Repayment Schedules
Things have certainly become better for average-earning households looking to borrow money for their homes. The pace at which they have been repaying the amount today places them really well with the repayment schedule. This, in a good number of cases, also provides them with a mortgage buffer sufficient enough to see them through periods of low income or unemployment.
Disposable household income
People, when they borrow money, have to repay it….nothing new in this. How they do it if not by reducing their disposable household income? Now, this is where the present borrowing scenario helps them. It allows them to keep their disposable household incomes higher than, say; they would have been able to keep had the mortgage rates been higher.
Borrowers way ahead of their repayment schedule
Those who have taken mortgages are doing really well, at times remaining a good 18 months ahead of the mortgage repayment schedules To reiterate, this allows them to set a strong mortgage buffer for themselves. They know that even if they fail for a few months due to reduction in income or unemployment, they can survive the drought owing to their past good work.
People doing well with their credit cards, too
The impact of low interest rates on the housing market is there for all to see. A bright statistic says that 85% of borrowers are running ahead of their schedule of minimum repayment. The efficacy of home loan repayments has percolated to the credit card atmosphere, too. Even here, 6% more credit cards are showing “fully paid”.
Cash rate is at 2.50% since 6th August 2013 and this can really help the borrowers rally strongly for at least some time now. Some of them will remember the terrible times they had to face post GFC. Well, things get balanced, don’t they?
How have you been doing in terms of your mortgage schedule?