Mortgage stress overstated

RFI research director Alan Shields said there was no evidence of deterioration in mortgage stress despite the findings of the Genworth Financial Mortgage Trends Report released yesterday. The proportion of mortgagors experiencing some level of difficulty, at 23 per cent, was the same in the 2007 and 2008 surveys. Shields said 77 per cent reported that they made their payments "easily" and of those 31 per cent said they made overpayments during the year. Respondents said their median monthly mortgage payment went up from a range between $1,000 and $1,500 in 2007 to a range between $1,500 and $2,000 in the latest survey. Only 35 per cent of non-property owners said they would consider a 100 per cent LVR mortgage. The most common reason for rejecting the no-deposit option was that it would be too expensive. Only 34 per cent said they would consider a family guarantee mortgage, down from the 41 per cent in the 2007 survey who said they would consider it. Long-term mortgages were a more popular option. Fifty-one per cent of respondents said they would consider a mortgage with a 35 or 40 year term as a way of making their house purchase more affordable.

Source: The Sheet

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