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What is Mortgage Stress and How to Avoid It

What is Mortgage Stress and How to Avoid It

Do you find that your mortgage is stressing you out lately? There are a number of reasons why you may feel anxious when a loan repayment is due. It may be because you can no longer afford to repay your home loan because of a change in your financial situation, it may be because of an increase in the interest rate or because you have too many debts.

Whatever the reason, it is possible to avoid mortgage stress with these helpful tips:

1. Be realistic

Be realistic about what you can afford when choosing a home to make sure you can easily repay your home loan.

2. Give your mortgage a health check

Assessing your home loan every couple of years will give you an idea of whether or not, your mortgage is still right for you and your needs and whether your lender still offers a competitive rate in the market.

3. Do your budget again

Your financial situation will likely change over the life of your loan. Your budget will differ from time to time. You may need to spend extra money on medicine, education or a holiday. So be sure to redo your budget whenever your circumstances change. Also, don’t forget to add a buffer or ‘breathing room’ in case of emergency.

4. Know your limit

A mortgage is a huge debt. You may be tempted to take out further debt so you can buy a new must-have gadget or a designer bag. If so, this can quickly take you off budget. Think first of your purchases, know your limits as a borrower, and as much as possible stick with your budget.

5.  Use a redraw offset facility

Reduce your mortgage stress by having a redraw offset facility. This lets you offset the balance of your home loan with the amount you have in your redraw offset facility. It’s a hassle-free way of paying for your home loan that also lets you save money in interest payable.

Follow all of these steps to lessen your chances of having to struggle with your loan repayments. Make sure that you speak with a lending specialist here at loans.com.au to help you understand your loan options. 

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