Money What record-low interest rates mean for Aussie families

12:56  08 november  2017
12:56  08 november  2017 Source:   MSN

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The Reserve Bank kept interest rates on hold today. But for many families facing financial ruin, those record low rates are vital as they try to hang on. Imagine - for a moment - your income doesn't cover your expenses.

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The Reserve Bank kept interest rates on hold today. But for many families facing financial ruin, those record low rates are vital as they try to hang on.

Imagine - for a moment - your income doesn't cover your expenses. It doesn't even come close.

Choices have to be made - the electricity bill ... supermarket, petrol for the car. What goes first? Maybe the mortgage?

"Missing one payment you can probably get away with, but if it's two or three then it’s a serious issue,” Martin North from Digital Finance Analytics told 9NEWS

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At present, 242,399 New South Wales households are in financial stress, according to figures from Digital Finance Analytics.

For some families, it's worse. Their income doesn't even cover their mortgage repayments.

There appear to be clusters where people are really struggling to pay their mortgage.

One is around Liverpool, Moorebank, Casula, and Prestons; there are 6400 people there.

Another area covers nearly 6000 families in Campbelltown, Appin, and St Helen's Park. And yet another is around Tregear, Shalvey and Mount Druitt - 4000 people there, wondering how or if they can pay their mortgage.

"We're also seeing it spreading into other areas ... into more affluent areas - even places like Bondi or Mosman,” Mr North said.

But where the stress is greatest, there's no surprise housing markets are also feeling the pinch.

“We noticed a bit of easing up in the buyers, and the pressure they were putting on purchasing homes in the area,” Michael Montes de Oca from Wiseberry Prestons real estate agencies said.

"It's a little bit slow I'd say."

With the housing market cooling down, Mr North said that low-interest rates and job security are more important than ever to families hanging on financially.

"If the job weakens a little or effectively if somebody gets ill or if interest rates move up just a little then people move significantly and quickly into severe stress,” he said.

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