Tuesday 3rd October 2023
What is a mortgage prisoner?
A mortgage prisoner is someone who finds themselves trapped in their current mortgage deal and is unable to remortgage or switch lenders due to various reasons, such as changes in financial circumstances or stricter lending criteria.
How does it happen?
Australia’s mortgage market has undergone enormous change over the last 18 months, with lenders increasing their interest rates as the cash rate has risen. This has meant that borrowers who were on fixed rate mortgages during the low-rate period are finding themselves rolling into home loans with significantly higher interest rates, increasing their repayments and adding additional financial strain.
On top of this, lending criteria continues to tighten meaning borrowers find it difficult to switch to another lender and feel ‘trapped’ by their situation, resulting in a feeling of being a ‘Mortgage Prisoner’.
What can you do?
The stress associated with being a mortgage prisoner can have a detrimental impact on mental health. Constantly struggling to make ends meet and feeling powerless can lead to anxiety, and a sense of hopelessness.
That’s why we encourage you to speak to a mortgage professional. With access to a wide range of lenders, mortgage brokers are empowered to seek out competitive deals that better suit clients who may feel trapped.
If you feel like a mortgage prisoner, get in touch today.