Skip to content
Reality Home Loans
Reality Home Loans
  • Home
  • About
  • Loans
    • First Home Buyers
    • Refinancing Your Home Loans
    • Investment Loans
    • House and Land Packages
  • Income Protection
  • Calculators
  • Reviews
  • News
  • Contact
0411 637 661
  • Home
  • About
  • Loans
    • First Home Buyers
    • Refinancing Your Home Loans
    • Investment Loans
    • House and Land Packages
  • Income Protection
  • Calculators
  • Reviews
  • News
  • Contact

Stress tested your home loan recently? Don’t stress

You are here:
  1. Home
  2. Uncategorised
  3. Stress tested your home loan…
Nov292018
Uncategorised

Seven in 10 Australian mortgage holders have not stress tested their home loan. But don’t stress, it’s much easier to do than you think.

Deloitte Access Economics’ latest report makes for pretty interesting reading.

It turns out the average Australian has a “wide-ranging hesitancy to make any sort of change” when it comes to their mortgages and other financial products.

“Why is it that educated consumers who know they’re not getting the best deal on many of their household products are so unwilling to take action to improve their household finances?” asks Deloitte.

Interesting mortgage stats

It turns out that 41% of Australians with a mortgage don’t check for interest rate changes because they either have no interest, don’t know what the RBA cash rate is, or do not see its relevance.

Even more interesting is that 68% of people say they have never stress tested their home loan.

“This is a particular worry,” says Deloitte.

“Recent estimates show that a 0.5% increase from current interest rates would cause mortgage stress to jump from one in four mortgaged households to one in three.”

Worse still, a 2% increase would throw half of all mortgaged households into stress.

Now, that might sound like a big increase, but don’t forget that it wasn’t so long ago that interest rates were at that level. In fact, it was only six years ago in June 2012.

So how do you stress test a home loan?

Simple.

Calculate how much extra a 0.5%, 1% and 2% increase on your mortgage would cost you each month and whether your budget can allow for it.

If you’d run into trouble, give us a call and we can work through some risk mitigation options with you, which could include locking in a home loan rate.

Why don’t people care about getting a better deal?

Interestingly, 1 in 3 people know there are better deals out there, while 1 in 5 don’t bother to check for a better deal.

It turns out there are three key reasons people don’t change to a home loan that would see them better off financially, with the first being decision making paralysis.

“Too often, many consumers get stuck before making a choice – and then they do nothing,” explains Deloitte.

Another big reason is people “hate feeling dumb”.

“Consumers also hesitate when they fear or worry about the possibility of making a bad decision. This, coupled with the fact that people tend to avoid what makes them nervous,” adds Deloitte.

The final key reason is that people simply put it off.

“Outcomes set in the distant future typically lack a sense of urgency in contrast with everyday needs, making it easy to defer decision making to a tomorrow that never arrives,” says Deloitte.

How can you overcome these barriers?

Well, here’s the good news. We can help you overcome all three.

For decision making paralysis we can come up with a shortlist of options, reducing the choices you need to make.

Worried about feeling dumb? I bet you we’d feel pretty dumb if we did your job for a day too. But we make it our business to help educate you and bring you up to speed in this market.

And how can you overcome avoidance? Simple. Contact Us today and we’ll get the ball rolling for you. You’ll be surprised how little time and effort it takes.

 

Message Brought to you by Reality Home Loans and Capital Credit Fix

 

 

 

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

Category: UncategorisedBy Mitch TilbrookNovember 29, 2018

Post navigation

PreviousPrevious post:Know What Your Travel Insurance Covers And What It Doesn’t.NextNext post:Buy Now Pay Later Credit Risk

Related Posts

Interest Only Loans About To End
January 10, 2019
Know What Your Travel Insurance Covers And What It Doesn’t.
December 13, 2018
Buy Now Pay Later Credit Risk
November 29, 2018
Christmas tips to help you save this silly season
November 14, 2018
Under the microscope: your micro-transactions
November 8, 2018
reality home loans
Property Market Downturn
October 30, 2018
Recent Posts
  • Mortgage Brokers Many Services
  • Interest Only Loans About To End
  • Know What Your Travel Insurance Covers And What It Doesn’t.
  • Stress tested your home loan recently? Don’t stress
  • Buy Now Pay Later Credit Risk
Recent Comments
  • Mitch Tilbrook on Home Loans For Investment Properties
  • Mitch Tilbrook on Home Loans For Investment Properties
  • Pamela on Home Loans For Investment Properties
  • Mitch Tilbrook on Home Loans For Investment Properties
  • Dennis on Home Loans For Investment Properties
Archives
  • May 2019
  • January 2019
  • December 2018
  • November 2018
  • October 2018
  • September 2018
  • August 2018
  • June 2018
  • May 2018
  • March 2018
  • January 2018
  • December 2017
  • November 2017
  • October 2017
  • August 2017
Categories
  • Home Loans
  • Investors
  • Latest News
  • Uncategorised
Meta
  • Log in
  • Entries feed
  • Comments feed
  • WordPress.org
  • Mitch was fantastic and helped us to look at loans. Mitch was very professional and I would recommend him as I have already. I did have a broker from HashChing prior-Ali who was unprofessional and never let me know what was happening in 5 months when he was stuffing us around , I would never recommend him to anyone. I was very against HashChing, but gave them another chance and fortunately met Mitch Tilbrook.

     

    Jill Lenffer read more

    Jill Lenffer
    Queanbeyan
  • Mitch was very patient and helpful. I would be very happy to deal with him again.

    Kelly Rourke

    read more

    Kelly Rourke
    Botany
  • I found Mitch to be very professional, responsive and enthusiastic. He made sure to call me back and explain the products he had on offer. He sounded very approachable and knows his area well. This time we’ve decided to go for a loan with someone else who I was in touch with since past 6 months due to tight deadlines for settlement but I’ve now kept Mitch in my contacts list as well and get in touch with him for sure should there any opportunity arises needing his services. Good Luck Mitch and thanks for all your help! read more

    Sushil Rawal
    Parramatta
  • Mitch was very helpful in this process of refinancing. He was knowledgeable and willing to look up information and details if not. He was competent in his job. But mostly he was friendly and give a sense of assurance that he will be looking after my best interest. I would recommend him without reservation. read more

    Rachida Ouysse
    Sylvania
  • We had a complex situation where we had to knock down our place so that we can rebuild a new home big enough for our expanding family. Mitch not only liaised with the bank to secure our construction loan but also with our builder and architect. As busy working parents this was a big help as it eliminated some of the hassles for us. Mitch was great in keeping us up to date on the progress of the application as well so we would have no hesitation in recommending him to other potential clients.

    Testimonials
    Mick & Suze
    Cronulla
  • We found Reality Home Loans to be a very trustworthy business. Mitch helped us refinance our home loan. We are now paying less in interest each month and obtained the extra funds we required to finish off our renovations.

    Testimonials
    Brett & Natasha Hardy
    Engadine

Stress tested your home loan recently? Don't stress

You are here:
  1. Home
  2. Uncategorised
  3. Stress tested your home loan…
Nov292018
Uncategorised

Seven in 10 Australian mortgage holders have not stress tested their home loan. But don’t stress, it’s much easier to do than you think.

Deloitte Access Economics’ latest report makes for pretty interesting reading.

It turns out the average Australian has a “wide-ranging hesitancy to make any sort of change” when it comes to their mortgages and other financial products.

“Why is it that educated consumers who know they’re not getting the best deal on many of their household products are so unwilling to take action to improve their household finances?” asks Deloitte.

Interesting mortgage stats

It turns out that 41% of Australians with a mortgage don’t check for interest rate changes because they either have no interest, don’t know what the RBA cash rate is, or do not see its relevance.

Even more interesting is that 68% of people say they have never stress tested their home loan.

“This is a particular worry,” says Deloitte.

“Recent estimates show that a 0.5% increase from current interest rates would cause mortgage stress to jump from one in four mortgaged households to one in three.”

Worse still, a 2% increase would throw half of all mortgaged households into stress.

Now, that might sound like a big increase, but don’t forget that it wasn’t so long ago that interest rates were at that level. In fact, it was only six years ago in June 2012.

So how do you stress test a home loan?

Simple.

Calculate how much extra a 0.5%, 1% and 2% increase on your mortgage would cost you each month and whether your budget can allow for it.

If you’d run into trouble, give us a call and we can work through some risk mitigation options with you, which could include locking in a home loan rate.

Why don’t people care about getting a better deal?

Interestingly, 1 in 3 people know there are better deals out there, while 1 in 5 don’t bother to check for a better deal.

It turns out there are three key reasons people don’t change to a home loan that would see them better off financially, with the first being decision making paralysis.

“Too often, many consumers get stuck before making a choice – and then they do nothing,” explains Deloitte.

Another big reason is people “hate feeling dumb”.

“Consumers also hesitate when they fear or worry about the possibility of making a bad decision. This, coupled with the fact that people tend to avoid what makes them nervous,” adds Deloitte.

The final key reason is that people simply put it off.

“Outcomes set in the distant future typically lack a sense of urgency in contrast with everyday needs, making it easy to defer decision making to a tomorrow that never arrives,” says Deloitte.

How can you overcome these barriers?

Well, here’s the good news. We can help you overcome all three.

For decision making paralysis we can come up with a shortlist of options, reducing the choices you need to make.

Worried about feeling dumb? I bet you we’d feel pretty dumb if we did your job for a day too. But we make it our business to help educate you and bring you up to speed in this market.

And how can you overcome avoidance? Simple. Give us a quick call today and we’ll get the ball rolling for you. You’ll be surprised how little time and effort it takes.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

Category: UncategorisedBy Mitch TilbrookNovember 29, 2018

Post navigation

PreviousPrevious post:Know What Your Travel Insurance Covers And What It Doesn’t.NextNext post:Buy Now Pay Later Credit Risk

Related Posts

Interest Only Loans About To End
January 10, 2019
Know What Your Travel Insurance Covers And What It Doesn’t.
December 13, 2018
Stress tested your home loan recently? Don’t stress
November 29, 2018
Buy Now Pay Later Credit Risk
November 29, 2018
Christmas tips to help you save this silly season
November 14, 2018
Under the microscope: your micro-transactions
November 8, 2018
Reality Home Loans
  • Home
  • About
  • Loans
  • Income Protection
  • Calculators
  • Reviews
  • News
  • Contact

Reality Home Loans

At Reality Homeloans, we provide a friendly, professional service with expert advice to match your home loan needs.

Opening Hours
Monday-Saturday 9am-5pm

Office Address 5/345 Kingsway, Caringbah 2229 Sydney, NSW

CBD Address Lvl 8, 99 Elizabeth Street, Sydney 2000 Sydney, NSW
Phone: 0411 637 661
Follow us
  • facebook
  • youtube
  • linkedin

Copyright © 2017 Reality Home Loans. Website by Modemedia.

Go to Top
Call Now Button
Trustpilot