Mortgage Stress: When to Walk Away 😔

Many Australians have felt the pressure of rising interest rates. This can lead to mortgage stress. It is a tough reality. Tash and Matt, a young couple, know this feeling well.

They lived on Sydney’s northern beaches. Their payments on their Newport home became too much. They wanted more financial freedom.

Their Journey to Financial Freedom

Tash and Matt made a big decision. They sold their investment property and their Newport home. They moved to the Gold Coast. They bought a more affordable home there.

They were lucky. Home prices went up 30% during Covid. This gave them extra money in their home. It let them pay off a lot of their debt. Selling was still stressful. The market was changing fast.

“We sold at the turn of the market which was very stressful. It took 12 weeks and we didn’t take the first offer.”

Selling Has Risks

Selling soon after buying can be risky. You might not make a profit. You have to pay for things like stamp duty and agent fees. Most people do have good home equity, but not everyone does. About 3% of borrowers have a cashflow problem. This puts them at risk of falling behind on loan payments.

Tips for Managing Mortgage Stress

A broker named Terri Unwin has some good advice:

• Live like you have a mortgage. If you are saving to buy, put the money you would pay on a mortgage into a savings account. This shows you what your budget will really feel like.
• Build a buffer. Pay more on your mortgage than you have to. This builds up savings. You can use this money later if you need it.

Another expert, Betsy Westcott, says you can still manage your mortgage, but not get ahead. She says freeing up cashflow can help you save and invest.

Tash and Matt’s move was challenging. But they are happy now. They are no longer “slaves to a mortgage”.

If you are facing mortgage stress, you have options. We can help you find a way forward. Read our article on mortgage refinance Australia to see how we can help.

Contact EZ Mortgage Broker today for a free chat.

• Phone: 1300 050 099 or 044789007
• Email: [email protected]

Important Information:

Mortgage Broker Online Pty Ltd, ABN: 28 657 661 615, Credit Rep Number 538522. AFG Accredited Member (AFG Australian Credit Licence: 389087).