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COVID pinching nearly 1 in 2 households
A new survey has shown just how widespread the financial impact of COVID-19 has been felt, and what it means for Australian households.
COVID pinching nearly 1 in 2 households
A new survey has shown just how widespread the financial impact of COVID-19 has been felt, and what it means for Australian households.
Compare The Market commissioned a survey of 1,000 Australian mortgage-holders that revealed 11 per cent of respondents, or their partners, had lost their jobs.
Another 5 per cent that are still employed believe its only a matter of time before they, too, become unemployed.
Almost one in five respondents, or their partners, have received a pay cut (18 per cent), while 11 per cent expect to be earning less in the foreseeable future.
To cope with the changed financial circumstances, four in five impacted households revealed that they are freeing up cash by deferring repayments on loans or credit cards, or accessing cash through super withdrawals, term deposits or life savings.
Nearly 65 per cent of individuals with affected income also indicated they would be ceasing or reducing their credit card usage.
The cuts to household income are also causing a rise in levels of concern around mortgage serviceability: 71 per cent of households with income cuts reported that they are worried about how they will continue mortgage repayments for the remainder of 2020.
Despite this, just one in four households who have lost income indicated they will consider deferring their payments.
Compare The Market has attempted to reassure home loan customers that it is okay to defer home loans at this time, after the Australian Banking Association confirmed that deferrals wouldn’t affect credit scores in situations where the individuals were up to date with repayments prior to the pandemic.
It’s also reminding mortgagors of the potential value and savings to be found through the refinancing of a loan.
“Many lenders are competing for new customers, so consumers could get a much more competitive rate, in addition to potentially accessing greater flexibility and benefits from a different lender,” the comparison platform revealed.
However, consumers will need to consider potential fees associated with refinancing, with Compare The Market noting also that it may not be an option for households who do find themselves in a financially difficult position.
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