Most of salary goes towards debt
What are these? More than 40pc of Australians spend more than half their monthly salary on paying off debt. MORE than 40 per cent of Australians spend around half their monthly income repaying mortgages, credit cards or personals loans, a new survey has found.The online survey conducted by mortgage broker Loan Market indicates that many have little left to spend at the end of the month and how vulnerable they are to interest rate fluctuations.
Almost 30 per cent of the 400 respondents to the survey said they spent more than 50 per cent of their income on debt repayments.
Releasing the survey result on Thursday, Loan Market chief operating officer Dean Ruston said this was “quite a staggering statistic”.
He said the Reserve Bank had a delicate task responding to the economic recovery while also having to consider the incredibly high debt burdens consumers are carrying.
The central bank raised the cash rate to 4.25 per cent this week, the the fifth increase in seven months.
Economists expect more to come in coming months, possibly as early as May.
“If official rates go back up to traditional levels of around 5.5 per cent from the current level of 4.25 per cent too quickly then a lot of mortgage holders will be struggling to make their repayments,” Mr Rushton said.
He said new borrowers should always factor in interest rates being higher when applying for home finance.
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