It is estimated that around 469,000 households will be suffering mortgage discomfort by December and the number of those in severe stress (facing a potential sale, foreclosure or forced refinance) could be as high as 267,000.

How can at-risk borrowers stay out of trouble, save money and own their property sooner?

Spokesperson for Mortgage Choice, Kristy Sheppard said, “There are simple strategies that can help borrowers avoid mortgage stress, reduce their loan term and the interest owed. It’s about them taking control of their finances by managing the mortgage instead of letting it manage them.”

“Common causes of mortgage stress are higher interest rates and rising living costs. However, over-indulgence in post-mortgage debt is also a big concern.

“Mortgage Choice’s 2010 Recent First Homeowner Survey revealed 15% had taken on within the first two years what they saw as ‘significant’ post-mortgage debt. Of those, 70% had spent between $0 and $20,000, 26% had racked up between $21,000 and $50,000, and 4% had extra debt of $51,000 or more.

“If these borrowers and others facing a similar situation want to better their mortgage situation they need to be proactive in their repayment strategy. By maintaining additional, higher and/or more regular repayments, sticking to a budget, fully utilising the loan facilities available and regularly ‘shopping around’, borrowers can potentially fast-track their way to outright ownership.”

Consider Mortgage Choice’s top tips:

About the Author

Peter Fletcher

Peter began his real estate career in 1985 selling tin shacks and red dirt in Kalgoorlie. Moving to Perth in 1989 he quickly moved into agency ownership. By 2006, Peter had built a thriving agency managing over 600 rental properties. He then sold the business, taking time out of the industry to complete Honours in a Bachelor of Arts. Peter is now the Managing Director of Residential Settlements in Burswood and an active Army reservist. Peter has had just one hot shower since the 10th of May 2008.