Whether you’re one of the thousands of Aussies who have come off two-year and three-year fixed-rate loans onto much higher variable rates, or you’re simply struggling to keep up with rates rise on your variable loan, servicing those larger repayments can be incredibly stressful. And you’re not alone, in fact according to Roy Morgan around 30.3% of mortgage holders – roughly 1.57 million Australians – are now at risk of experiencing some kind of “mortgage stress”.
So, what can you do about it? Well, like most financial decisions there isn’t a one-size-fits-all solution. However, here are three ways to try to ease the burden of your rising repayments.
1. Rethink your loans: Start by contacting your current lender and asking for either a discount on your repayments or to explore other loan packages that may work better for you. In most cases, lenders may offer a short-term solution. You could also consider refinancing your loan, where you switch your current home loan to another bank to improve your financial position, potentially with lower interest rates and fees. This can be a challenging option if you have had any change of income, circumstances or living expenses since you first acquired the loan.
2. Re-evaluate your investment properties: While investing in property is an Australian pastime, sometimes it can be a financial burden. However, if you currently short-term rent your property with companies like Airbnb or Stayz, you could consider a long-term loan while most Australians are tightening their belts and travelling less. A steady income from renting could be a better solution for you than relying on inconsistent short-term payments. You could also consider selling your investment property, however as the market is generally flooded with homes for sale, it pays to stand out (Mortgage Stress Is Set To Get Worse. Is It Time To Sell?) At Your Property Profits, we can help renovate your property to sale. With no upfront costs, we finance and execute your renovation (in conjunction with our team of stylists and tradies) so you can sell faster, and for more profit.
3. Curb your spending: With the average cost of living for a family of four being $5378 a month, it’s challenging to know how to cut those costs down. However, it can be the little things that add up. Doing an audit of your streaming services (TV, audio, apps) can save money, as can revaluating your insurance and utilities choices, and shopping around for your weekly grocery shops. Even cutting out two cafe-bought coffees a day (yes, we’re going there…) can save you around $3276 a year! A technique that many financial experts agree can help on a daily basis is to define your weekly budget for incidentals (parking, cafes, lunches) and paying for them in cash. This can help you budget better as you can see how much money you have left for the week (unlike using your debit card).
4. Consider selling and moving: With mortgage rates set to continue rising, for some the best option will be to sell their home and either rent or buy again in a more affordable area. However, with this option, it’s essential to make sure you’ll be able to walk away financially better off. At Your Property Profits, we take houses that need a little love, and renovate them to be more in line with what today’s buyer is looking for. That could mean restyling, moving walls, painting, remodelling kitchens, you name it. We make sure the full potential of your home is realised so you can sell faster, and likely for more profit.
Don’t have the money to do a renovation? No problem, that’s where our Financial Assistance Package can help. This is an additional service we provide for homeowners experiencing financial hardship. It goes hand in hand with our flagship zero-upfront-cost, renovation‑for‑profit service. It’s not means tested and you don’t need to jump through any hoops to take advantage of it. We give you the financial assistance you need to get rid of debts from the banks and use our knowledge, experience, and funds to renovate your house to get you the maximum possible price when you sell.
We get the banks off your back, pay for, and undertake all the renovations necessary to get you on the market fast and for top dollar.
In the end, you’ll likely walk away debt-free or better, with tens of thousands of dollars in your pocket to start your new life. Interested in finding out what Your Property Profits can do for you? Find out more or contact us for a chat about your home.