Latest news with #RichardWhitten


7NEWS
10-07-2025
- Business
- 7NEWS
1.2 million borrowers still at risk of mortgage stress, as RBA holds rate
As Australians recover from the Reserve Bank's shock decision to hold the cash rate this week, a new survey has found recent rate cuts have provided some relief for mortgage holders, with the proportion of households under mortgage stress decreasing in recent months. The survey of 1000 people by comparison company Finder revealed the number of borrowers who spend more than 30 per cent of their after-tax income on mortgage repayments has fallen from nearly 50 per cent in February to just over one-third. The definition of mortgage stress is when a large portion of your income - typically 30 per cent - is spent on your mortgage, leaving little for everyday expenses and unexpected costs. The latest analysis by Finder revealed 37 per cent of homeowners are spending more than 30 per cent of their household income on mortgage payments, compared to 47 per cent in February. That's 1.2 million borrowers who are still at risk of mortgage stress - down from 1.55 million earlier this year. Finder's most recent analysis showing almost one in five (19 per cent) spend more than 40 per cent of their household income on mortgage repayments. Even more startling is that seven per cent of borrowers are spending more than half of their income on home repayments. Meanwhile, Finder's Consumer Sentiment Tracker reveals 13 per cent of households have missed at least one mortgage repayment in the past six months. Despite the shocking statistics, Finder home loans expert Richard Whitten, says mortgage holders are under significantly less financial strain since the rate cuts in February and May. "The loan to income ratio is improving with thousands of homeowners getting relief when they need it most," Whitten said. "This shift marks a turning point - for the first time in years, many households are finally able to breathe financially," he added. The survey found two thirds of borrowers (63 per cent) are now spending less than 30 per cent of their income on mortgage payments, compared to 53 per cent in February. While the average Australian mortgage holder spends 28 per cent of their after-tax income on their mortgage - just below the recommended threshold of 30 per cent. However, Whitten was quick to add that many households will be relying on further rate cuts to ease financial pressure. "Low mortgage stress doesn't mean everyone is suddenly flush with cash," he said. "While the two rate drops so far in 2025 have provided some relief month to month, many families are still living pay cheque to pay cheque. "The fact that over a million borrowers are still stretched shows we're not out of the woods - but the worst may be behind us," he said. Whitten encouraged borrowers to explore refinancing as lenders drop their rates. "Refinancing to a cheaper loan could put hundreds of dollars back in homeowners' pockets each month - a simple move that can ease pressure and keep repayments on track," he said.

News.com.au
03-07-2025
- Business
- News.com.au
Interest rates risk emerges after key bank move
Expected interest rate cuts later this month will give most homeowners reason to celebrate but the cuts could be food for thought for one group: those who have recently fixed their loans. Homeowners and new property buyers have been urged to consider recent fixed rate offers by banks with caution given that there is a strong likelihood of variable rates dropping later this month. Lenders are currently offering fixed rates as low as 4.99 per cent – well below the average variable rate of about 5.7 per cent for new borrowers. ANZ has also joined in the cutting spree, dropping rates on some of its fixed rate products by 10-35 basis points this week. ANZ now has the cheapest fixed rates of the big four at 5.19 per cent for two-year fixed terms. mortgage expert Richard Whitten said homeowners tempted to fix their rates should consider the reason banks were introducing these offers. 'A lower fixed rate loan is often a bet that variable rates will fall further, allowing the bank to lock in a better deal for itself in the medium term,' Mr Whitten said. He added that lower fixed rates may be tempting for some. 'Most borrowers stick with variable rate loans. And these tend to be more competitive than fixed rate loans. But plenty of borrowers are waiting to lock in a low rate if the deals are good enough. 'There will always be some people willing to fix when rates drop. I think for some, 4.99 per cent looks pretty good right now.' Banks' fixed rate offers were a sign of which way they expected the cash rate to go when the Reserve Bank meets to discuss monetary policy next week Tuesday, Mr Whitten said. 'Lenders set their fixed rates based on many factors, but anticipation of future variable rate drops (via cuts to the cash rate) is one of them. Lenders dropping their fixed rates now is a sign that they expect variable rates to fall even further.' Mr Whitten said that borrowers who fixed their loans would effectively be paying more for 'certainty'. He explained that lenders introducing offers as low as 4.99 per cent may be banking on a 50 basis points drop in interest rates. Were this to happen, a variable rate of 5.45 per cent would drop to 4.95 per cent, allowing the bank to get slightly ahead if the borrower fixed their rate at 4.99 per cent for several years, Mr Whitten said. With fixed rate customers making up just 3 per cent of the customer base of some lenders, Mr Whitten added that there has been some reluctance from borrowers to take up fix rate offers so far. A recent Finder survey indicated most mortgage holders who were open to fixing their loans would only do so if the rates dropped as low as 3.11 per cent. But the temptation has been rising for some mortgage holders. The research found 18 per cent mortgage holders are close to fixing – admitting they would consider fixing all or part of their mortgage when rates drop to 4–4.9 per cent. One in four (26 per cent) would fix their mortgage when there's a three in front (3–3.9 per cent), while 25 per cent would wait to fix until fixed rates drop to between 2 per cent and 2.9 per cent. One in five (21 per cent) are holding out until the fixed rates are under 2 per cent. Mr Whitten said with rates starting to fall, fixed loans are back on the radar for borrowers. 'A fixed rate at 3.11 per cent is the magic number for many Aussies – it's the tipping point where borrowers feel confident to lock in their loans. 'Borrowers who fixed at the perfect moment when rates were at their lowest in 2020 managed to lock in historically low rates even as variable rates started rising. 'But it's not about beating the banks. Fixing your rate is more about buying peace of mind and predictability in an increasingly expensive world.' Canstar data insights director Sally Tindall said 13 different lenders were now offering at least one fixed rate under 5 per cent. 'If you're looking to lock in your rate, don't go aiming for one that starts with a 5 or a 6. You should be looking in the 4's,' Ms Tindall said. Bendigo Bank chief economist David Robertson said the RBA appeared 'very likely' to cut rates next week to 3.6 per cent.

News.com.au
25-06-2025
- Business
- News.com.au
What to do if you miss a mortgage repayment
You miss a mortgage repayment, what happens next? According to the experts, that largely depends on how quickly you spring into action. Say you miss one payment but you quickly make good. Then you stay on top of your future repayments. Finder home loans expert Richard Whitten says you may get hit with a late fee. If, on the other hand, you fail to make up that missed repayment, you could be at the top of a slippery slope. 'You'll soon receive a default notice and your credit score will take a hit,' he says. 'If you're in this situation you're likely in financial distress. 'In the worst case scenario your lender can start legal proceedings against you and ultimately reclaim your debt by forcing the sale of the property.' Financial Rights Legal Centre director of Casework Alexandra Kelly says if you receive a formal default notice you should take it extremely seriously. Sneaky bank move costing you thousands 'If you do not rectify the default in the period (generally a minimum of 31 days) they can accelerate your mortgage – which means it is no longer about the arrears, but the full amount due under your mortgage,' She says. 'This can then result in formal repossession proceedings taking place through the relevant state court. 'If a property is vacant, they do not need a court order.' Mortgage broker and managing director of Atelier Wealth Aaron Christie-David says if you come into unforeseen circumstances, like a job loss or illness that will affect your ability to pay your mortgage, you should call your bank or broker to discuss hardship arrangements before you start missing repayments. 'You've got to put your hand up for help super, super early,' he says. 'You need to ask for permission – you can't ask for forgiveness.' The Financial Rights Legal Centre has a Mortgage Stress handbook as well as sample letters on their website that show how to ask your lender for hardship arrangements. There's also a free and confidential National Debt Helpline on 1800 007 007. 'Lenders are obliged to offer hardship arrangements to people in hardship, and this can help reflect your situation accurately in your credit history,' Kelly says. INSURANCE COVER If you can't afford to repay your mortgage on an ongoing basis, you may be faced with the difficult decision to sell, but if it looks like you will still owe the bank a shortfall after the sale, there are some things to consider. 'A free financial counsellor can help you understand your financial position and give you some guidance on options available,' Kelly says. 'Sometimes people hold insurance cover they can claim on during hardship – such as income protection or mortgage protection insurance. But, this is not always held or widely claimable – it will depend on the cause of your inability to pay.' Lenders Mortgage Insurance will not protect you in the case of mortgage default. Instead, it protects the lender. 'Any shortfall amount left owing (if the property is sold for less than the mortgage debt) will be owed by you as an unsecured personal debt – but to the insurer and not the lender,' Kelly says. 'The insurer may make contact through a debt collector to demand repayment.' Some LMI providers, like Helia, work alongside lenders to support borrowers experiencing hardship. 'Helia assesses waiving shortfall debt on a case-by-case basis and considers circumstances such as family violence and illness,' a company spokeswoman says. 'In 2024, Helia supported over 11,000 families experiencing hardship support helping them remain in their homes and provided $4.6m in shortfall debt waivers for borrowers who sold their property.' NEGATIVE EQUITY It's not common for Australian borrowers to wind up in negative equity, Whitten says. September 2024 data from the RBA shows less than 1 per cent of all owner-occupier housing loan balances at the time were more than 90 days in arrears and that just 0.5 per cent of loans in arrears were estimated to be in negative equity. 'RBA analysis in 2024 found that the borrowers most likely to be in mortgage arrears were high LVR borrowers (borrowers with smaller deposits relative to the amount they borrow),' Whitten says. Whether there is a shortfall on a property at the time of sale can depend on several factors, including market fluctuations and the borrower's ability to manage debt, Kelly says. If you are trying to sell a property where you are receiving offers worth less than the amount you owe you need to ask your lender's permission, she adds. 'They will look at factors to make sure the offer is reasonable. You should always seek permission before you enter into a contract of sale, as they will need to agree,' she says.


Daily Telegraph
21-06-2025
- Business
- Daily Telegraph
NSW suburbs that outperform top super fund
NSW homeowners in over 200 suburbs could be building retirement wealth faster than their super fund, new research reveals. Comparison site Finder has revealed how Australia's super funds compared to that of property price growth over the past ten years. The research found that a shocking 23 per cent – equivalent to around 4.6 million people – said they didn't have enough money in their super fund or other investments to get by in retirement. Australian Retirement Trust's super savings high growth fund had the highest returns, with a 8.79 per cent annual 10 year return, yet there were over 200 suburbs in NSW that out performed that. Houses in Millfield, Lockhart, Brunswick Heads and Clareville were among the top performers, growing by an average of 11-16 per cent annually over the past 10 years. MORE: 'They're off': $962m king's look into real estate woes Retired publican lists $12m apartment How you can save this end of financial year The average 10-year performance across all super funds is 5.7 per cent a year, according to Finder, while Sydney's 10 year annual compound property growth rate was 6.4 per cent. Finders money expert Richard Whitten said the more attention you give your superannuation now, the better off you'll be. 'It's truly a shame to reach retirement age only to find you have 'too little too late.' You can avoid this by taking proactive steps to engage with your super as soon as possible,' he said. He added that to have a comfortable retirement, a single person might need around $595,000 in their super by 67. 'Many Australians are still well below the amounts suggested for a comfortable retirement, making proactive engagement even more critical.' Ben Kingsley, managing director of Empower Wealth Advisory and co-author of 'How to retire on $3,000 a week,' said your return on investment could be higher with property, but warned there were always risks involved. 'If you're going to invest in property you don't want to be speculating, you want to be investing for the decades, not the short period of time,' he said. MORE: Singles face impossible property reality 'One of the advantages of investing in property is it isn't locked away until you're in your 60s. It gives you the ability to leverage from those returns, to accelerate some growth in further returns – use the proceeds or equity to add to your initial property portfolio, which is something to consider.' '(Super) is a sort of set and forget for most Australians, with property when you do have ownership you have control, you can tinker with the property itself you can add value to the property,' he added. He noted it was important to diversify when it came to setting up for retirement. 'You can't save your way to retirement, you need to put your money to work, whether that's additional contributions to super, or investing in shares or property, you're better off starting to think about it in your 30s,' he said. Canstar's director of data insights, Sally Tindall, said Aussie's shouldn't be choosing between a healthy super amount and a property, but should aim to invest in both. 'It comes down to personal preference, but open your mind to achieving both. Don't put all your eggs in one basket,' she said. 'It's not a simple comparison and there's a multitude of factors, there's tax implications on both sides, and whether you're purchasing as an investor or an owner-occupier,' she said. Recent Labor government tax changes, which apply an additional 15 per cent tax on earnings for super balances exceeding $3 million, would affect an estimated 80,000 Australians (0.5% of super account holders). MORE: Rare backyard find that can kill you 'It will be interesting to see how that plays out over time, as the government has said that $3m won't be indexed, which could then start to impact many more people in many years to come as the number of people with that sum starts to increase, so that's another factor in the equation.' With the super guarantee increasing to 12 per cent on July 1, Ms Tindall said this may encourage some people to take the property route, knowing their employee is contributing more to their super. 'It's also not just the super vs. mortgage, there are plenty of other things like shares people could be putting their money into. It's important to understand what the mix is and understand the pros and cons and the sacrifice you might have to make, as well as the benefits you can get from each one.' MORE: New builds vanish amid loan slump TOP 20 NSW GROWTH SUBURBS OVER 10 YEAR AVERAGE

News.com.au
21-06-2025
- Business
- News.com.au
NSW suburbs that outperform top super fund
NSW homeowners in over 200 suburbs could be building retirement wealth faster than their super fund, new research reveals. Comparison site Finder has revealed how Australia's super funds compared to that of property price growth over the past ten years. The research found that a shocking 23 per cent – equivalent to around 4.6 million people – said they didn't have enough money in their super fund or other investments to get by in retirement. Australian Retirement Trust's super savings high growth fund had the highest returns, with a 8.79 per cent annual 10 year return, yet there were over 200 suburbs in NSW that out performed that. Houses in Millfield, Lockhart, Brunswick Heads and Clareville were among the top performers, growing by an average of 11-16 per cent annually over the past 10 years. MORE: 'They're off': $962m king's look into real estate woes The average 10-year performance across all super funds is 5.7 per cent a year, according to Finder, while Sydney's 10 year annual compound property growth rate was 6.4 per cent. Finders money expert Richard Whitten said the more attention you give your superannuation now, the better off you'll be. 'It's truly a shame to reach retirement age only to find you have 'too little too late.' You can avoid this by taking proactive steps to engage with your super as soon as possible,' he said. He added that to have a comfortable retirement, a single person might need around $595,000 in their super by 67. 'Many Australians are still well below the amounts suggested for a comfortable retirement, making proactive engagement even more critical.' Ben Kingsley, managing director of Empower Wealth Advisory and co-author of 'How to retire on $3,000 a week,' said your return on investment could be higher with property, but warned there were always risks involved. 'If you're going to invest in property you don't want to be speculating, you want to be investing for the decades, not the short period of time,' he said. MORE: Singles face impossible property reality 'One of the advantages of investing in property is it isn't locked away until you're in your 60s. It gives you the ability to leverage from those returns, to accelerate some growth in further returns – use the proceeds or equity to add to your initial property portfolio, which is something to consider.' '(Super) is a sort of set and forget for most Australians, with property when you do have ownership you have control, you can tinker with the property itself you can add value to the property,' he added. He noted it was important to diversify when it came to setting up for retirement. 'You can't save your way to retirement, you need to put your money to work, whether that's additional contributions to super, or investing in shares or property, you're better off starting to think about it in your 30s,' he said. Canstar's director of data insights, Sally Tindall, said Aussie's shouldn't be choosing between a healthy super amount and a property, but should aim to invest in both. 'It comes down to personal preference, but open your mind to achieving both. Don't put all your eggs in one basket,' she said. 'It's not a simple comparison and there's a multitude of factors, there's tax implications on both sides, and whether you're purchasing as an investor or an owner-occupier,' she said. Recent Labor government tax changes, which apply an additional 15 per cent tax on earnings for super balances exceeding $3 million, would affect an estimated 80,000 Australians (0.5% of super account holders). MORE: Rare backyard find that can kill you 'It will be interesting to see how that plays out over time, as the government has said that $3m won't be indexed, which could then start to impact many more people in many years to come as the number of people with that sum starts to increase, so that's another factor in the equation.' With the super guarantee increasing to 12 per cent on July 1, Ms Tindall said this may encourage some people to take the property route, knowing their employee is contributing more to their super. 'It's also not just the super vs. mortgage, there are plenty of other things like shares people could be putting their money into. It's important to understand what the mix is and understand the pros and cons and the sacrifice you might have to make, as well as the benefits you can get from each one.' TOP 20 NSW GROWTH SUBURBS OVER 10 YEAR AVERAGE SUBURB REGION PROPERTY TYPE Annual Change in Median Price 10 years Thurgoona Murray Unit 19.2 Millfield Hunter Valley exc Newcastle House 16.1 Lockhart Riverina House 14.2 Casuarina Richmond – Tweed Unit 13.7 Jindabyne Capital Region Unit 13.1 South Kempsey Mid North Coast House 13 Brunswick Heads Richmond – Tweed House 12.6 Murwillumbah Richmond – Tweed Unit 12.1 Denhams Beach Capital Region House 12 Bombala Capital Region House 11.9 Fishermans Paradise Southern Highlands and Shoalhaven House 11.8 Harden Capital Region House 11.7 Clareville Sydney – Northern Beaches House 11.7 Jindabyne Capital Region House 11.6 Bogangar Richmond – Tweed House 11.6 Horsley Park Sydney – South West House 11.6 Berridale Capital Region House 11.5 Coal Point Newcastle and Lake Macquarie House 11.5 Kandos Central West House 11.5 Gundagai Riverina House 11.4