MORE than 90,000 recent first-home buyers could be forced out of their homes because interest rates have risen faster than expected. They have been caught out by the Reserve Bank’s increase in rates – yesterday’s increase to 4.5 per cent was the third in three months and the sixth since October.
The hike means repayments on a $300,000 mortgage will increase by about $50 a month to nearly $2000, and economists are warning that there will be more pain. Many believe that rates will hit 6 per cent by the end of next year.
Exclusive data from leading financial services consultancy Fujitsu shows mortgage stress is affecting nearly 40 per cent of the 270,000 who have entered the property market since June 2008, The Daily Telegraph reported.
The effect of the increase has forced some recent buyers to find second jobs. “Rates have gone up faster than we expected,” real estate worker Emma Chenery, 24, from Sydney said. “Six in the past eight months – that’s a lot.”