Many in mortgage payment distress

STRESSED mortgage holders are struggling with repayments despite interest rates remaining at historical lows.

Making lifestyle changes — from cutting back on incidental expenses to giving up holidays — are among the measures borrowers are resorting to to meet their loan commitments.

The Reserve Bank of Australia has kept the cash rate at 1.5 per cent since August 2016 but new analysis has revealed one in two Australians are in mortgage stress.

Research compiled for online home loan marketplace Has h Chi n g found borrowers are being forced to reign in their spending — 44 per cent have cut back on nonessential items and 40 per cent sacrificing going on a holiday.

Consumer finance expert Lisa Montgomery said there was always some level of stress when you had a mortgage.

“This reflects that people are under pressure from so many areas in their finances including other debts like credit card debts and personal loans,’’ she said.

“The cost of utilities has gone up and so, too, have general household items.”

Interest rates remain low for both owner occupiers and investors with many deals below the four per cent mark.

HashChing’s chief executive officer Mandeep Sodhi said about one in three borrowers were committing more than 25 per cent of their income towards repayments.

“Anything about 30 per cent will usually mean you are stretched,’’ he said.