One in three Australians are losing sleep over rising interest rates

One in three people are losing sleep over rate hikes, 600,000 to take advantage of home equity and one simple measure would cut your electric bill by 24%. Here are five things you may have missed this week.

Borrowers are not ready for rising rates

A Mortgage Choice survey found that the majority of Australian mortgage holders are unprepared for an interest rate hike.

One in five respondents said they would be concerned if mortgage rates only increased by 1%, and 48% would be concerned if rates increased by 2%.

Worryingly, one in two respondents could only afford to pay $201 more on their loan per month.

These concerns see one in three borrowers losing sleep over interest rate hikes.

Despite concerns, more than half (55%) of those with a home loan have no idea what rate they are currently paying.

Mortgage Choice National Sales Manager, David Zammit, says, “In this environment, it’s important that borrowers are informed so they don’t overpay.

He adds: “With the cost of living rising rapidly, Australians will be wondering how to ease the burden of their pockets on their hips. Getting a better deal on your home loan is a good place to start.”

Downsizer ranks at inflating 600,000

The real estate market may be cooling off, but many homeowners have amassed a decent share of their home equity in recent years thanks to the combination of record high mortgage rates and soaring home values. in 2022.

That means 600,000 households plan to downsize to a smaller property over the next 12 months.

Research by Finder shows that nearly half of potential downsizing plans intend to make the decision to unlock equity.

More than 200,000 households are downsizing because they don’t need as much space as they used to.

The rest (162,000 households) say downsizing will be a temporary decision to save money.

Sarah Megginson of Finder says “downsizing is one way to potentially lower your housing costs, if you can find cheaper housing that still meets your needs.”

She cautions: “You need to be aware of buying and selling costs like stamp duty and real estate commissions as they can really erode the equity you have built up.”

A hack to reduce electricity bills by 24%

Electricity bills will skyrocket just in time for winter. It is therefore essential to look for a better deal, especially if you have been with the same provider or power plan for an extended period.

Australia’s energy regulator says residential customers can currently save around $443 or 24% on their bills by switching to a new plan or provider. Small businesses can save around $1,308 or 29%.

To get started, dust off your latest electricity bill, then head over to the Energy Made Easy price comparison website.

By entering a few basic details or uploading your invoice, the site shows what other retailers are offering.

The Field family put the site to the test and discovered that we could do much better than what the AER suggests, potentially reducing our annual electricity bill by around 50% by switching from our current supplier. The savings were slightly lower, but still significant, by switching to a different plan with the same provider.

CHOICE calls for better protections in the crypto market

Nearly one in 10 Australians have purchased cryptocurrency in the past 12 months, but consumer group CHOICE says many have been scammed and the recent crypto market crash has wiped out billions of dollars in value. consumer money.

CHOICE’s recent Consumer Pulse survey shows that more than half of us don’t know if crypto trading comes with similar consumer protections that apply to the stock market. About the same number of people think such protections should be in place.

As things stand, CHOICE says enforceable protections in the unregulated cryptocurrency market are somewhere between negligible and non-existent.

In a submission to the federal government, CHOICE calls for a regulatory regime with consumer protection obligations to help end consumer harm caused by crypto.

Seven out of 10 homebuyers turn to a mortgage broker

A record proportion of homebuyers are turning to a mortgage broker for help in arranging a home loan.

Figures from the Mortgage and Finance Association of Australia (MFAA) show that seven in 10 (69.5%) new residential property loans in the March quarter of 2022 were arranged through a broker, compared to the previous record 66.5% in the last quarter of 2021.

MFAA Managing Director Mike Felton says the brokerage industry has successfully implemented significant reforms over several years. These include the legal obligation for brokers to act in the best interests of the client, which was introduced in early 2021.

Felton adds, “As interest rates and costs rise, mortgage brokers are uniquely positioned to help clients find a fairer deal that is in their best interest.

Mortgage brokers generally do not charge borrowers a fee for their services because they receive a commission from the lenders.

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