Renters and mortgaged home owners’ savings are taking a hit as interest rates and the cost of living continue to rise.
Low savings buffers mean individuals are faced with limited ability to raise funds in an emergency, according to research by the Consumer Policy Research Centre.
Thirty-eight per cent of mortgaged homeowners and 43 per cent of renters in Victoria reported they would not be able raise more than $2000 if faced with an emergency.
Ten per cent of homeowners and 27 per cent of renters said they could not raise more than $500.
CPRC chief executive Erin Turner said Victorians were already stretched thin by the rising cost of living and that rising interest rates would compound this pressure.
“The rapid rise in interest rates has really started to bite people with a mortgage,” Ms Turner said.
“Seventy eight per cent of mortgaged homeowners in Victoria have seen their mortgage increase in the past 12 months.
“One in seven reported their repayments have increased by more than $700 per month.”
These increases mean households have less disposable income and broader affordability problems.
“Both homeowners with a mortgage and renters are turning to informal sources of finance and unregulated forms of credit to get by,” Ms Turner said.
“If you’re one of the many Victorians feeling the cost-of-living crunch, know that help is available.
“If you have a mortgage, speak to your bank about hardship options as early as you can.
“Anyone struggling can also get help from a free and independent financial counsellor.”