Mortgage stress hitting hard

Anglicare is responding to a growing number of people experiencing mortgage stress.

Not everyone with a home is financially secure, with many now spending more than 30% of their pre-tax income on mortgage repayments. The rise in mortgage stress is coinciding with a statewide shortage of affordable housing.

“Lots of people are living from pay to pay,” said Jonathan Turk, Anglicare’s Financial Counselling Service Coordinator. “That means they do not have a buffer to get them through tight times”.

“All it takes is an unexpected life event – divorce, illness or injury, a change in employment or a death in the family. If these things happen many people do not have savings to draw on,” he said.

Anglicare operates the National Debt Helpline in Tasmania and also provides free financial counselling services at our Hobart, Launceston, Devonport and Burnie offices. In an average week, Anglicare receives about 120 calls – with half of these from new clients. We also provide face to face counselling sessions to about 30 people every day.

Jonathan said counsellors had observed an increase in people experiencing mortgage stress, particularly those with homes in the greater Hobart region.

“These homeowners have often over-extended themselves to buy into the market or to upsize their homes as their families have grown,” said Jonathan. “What we’ve observed is that anybody can fall into mortgage stress. These are people from diverse backgrounds and across all age groups. There’s a tendency to think of this as a problem for low income households but high income households are also exposed”.

Jonathan said banks were able to vary a loan if it the customer could demonstrate they had capacity to service the revised terms.

“Banks do not like it when customers bury their heads in the sand,” he said. “But they’re good at working with people who approach them early on to say: ‘I can’t meet my mortgage repayments’. And they respond even better if an organisation like Anglicare is involved. They can see that a trusted independent body has already reviewed the person’s income earning potential”.

Anglicare’s financial counselling services are free, confidential and independent.  Through budgeting assistance and debt management support we assist people to review their expenses to find potential savings. We can also advocate to banks on behalf of clients.

To find out more about our services, visit Financial Counselling or call us: 1-800-007-007.