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First homebuyers have no idea on rates
Released 23 February 2011

Over one quarter of recent homebuyers surveyed by Mortgage Choice do not know their home loan’s interest rate and almost one in every five have taken on significant extra debt within the first two years.   

On a brighter note 83% had no regrets about their purchase and 63% were making higher than necessary loan repayments, with 33% of these contributing as much as they could and leaving it in the account to offset the interest owed.

Mortgage Choice spokesperson Kristy Sheppard said, “Australia has a very low mortgage arrears rate and it’s likely this group of buyers will help us to maintain this position.

“Although this year’s respondents were older at the time of purchase than in last year’s survey and a higher proportion made lifestyle sacrifices in order to buy, the vast majority were satisfied with their first home purchase and had a sound repayment strategy."
Sheppard said what surprised her the most was finding out that so many had racked up substantial extra debt within a short time after buying.

“Almost one in every five recent first homeowners had taken on what they defined as ‘significant’ additional debt within the first two years. We can only hope they have factored this into their budget and are paying it off as quickly as possible.”

When it came to the top three key motivations for buying their first home, respondents were most likely to point to ‘set myself up financially for the future by getting my foot in the property market door’.

Meanwhile, 42% said ‘rising rents made owning a property more attractive than renting’ and 26% said ‘I see more benefits in investments such as property than I do in the share market’.

The Mortgage Choice 2011 Recent First Homeowner Survey of 803 Australians who had bought their first home in the past two years ran online from 8 to 17 February.