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Mortgage stress hits first home buyers

12/03/2010

Forty per cent of first-time home buyers are suffering mortgage stress. Fujitsu found 581,000 households were in mortgage stress, up 0.7 per cent during February, before the March 0.25 per cent rate rise. Many more first home buyer households are expected to fall into ‚mortgage stress during 2010.

Hardest hit were first-time buyers who entered the market in the past 18 months. Almost 220,000 households faced potential foreclosure and having their properties sold, Fujitsu executive director Martin North said yesterday. Mortgage stress is when families must reduce other spending, borrow on credit cards or refinance loans to meet home loan repayments.

Severe mortgage stress is when these households have fallen behind in repayments. 49 per cent of first home buyers who bought in the last 18 months are expected to be in mortgage stress by the end of the year.

Source: Herald Sun



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