One-in-five mortgage holders rue taking on huge home loans

Hundreds of thousands of Australian mortgage holders think they've borrowed too heavily to finance their home loans, according to new research today.

A survey by comparison site Finder canvassed 1017 people, 297 of whom have a mortgage, and showed one in five think the financial burden is too much.

That is equivalent to 627,000 homeowners across Australia.

READ MORE: RBA spares cash-strapped households as rates kept on hold

The findings come after the Reserve Bank of Australia board decided yesterday to keep interest rates on hold at 3.6 per cent.

While the decision left mortgage holders disappointed, economists and commentators have not ruled out a possible hike in the cash rate next year.

They point to inflation stubbornly remaining outside the RBA's target range as a hurdle to further cuts.

Finder home loans expert Richard Whitten said some borrowers had stretched themselves to enter the housing market.

"Many Aussies who took out a loan at the top of their borrowing capacity are now finding themselves with a mortgage that's pushing their budget to its limits.

"When you layer home loan repayments on top of everything else – groceries, energy bills, insurance and more – the costs quickly add up.

"Homeowners are having to make some tough decisions – cutting back on essentials, dipping into emergency savings, or postponing major life plans just to keep up with their repayments." 

Last month, 37 per cent of homeowners said they struggled to pay their mortgage, according to Finder's Consumer Sentiment Tracker.

Whitten warned if rates increase next year, anyone who's already stretched will feel the pinch immediately.

"Shaving even half a per cent off your interest rate can save you thousands of dollars."

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