A recent customer survey conducted by leading mortgage lender Resi Mortgage Corporation shows an increasing number of borrowers are planning to consolidate debt and obtain extra finance to improve their existing home – but have revised their plans to purchase a larger home or buy an investment property.

Resi’s Head of Consumer Advocacy, Lisa Montgomery, says of the 700 customers that were polled about their future plans, many were looking to take advantage of current interest rate levels on a small scale, but on a large scale were still taking a more cautious approach.

 

She said: “We would expect this trend will improve as rates stabilise and more confidence returns to the market, but at the moment borrowers are very much focused on using this low rate environment to get their overall level of debt under control so they have more options at their disposal in the future.”

 

The survey asked the respondents whether their future plans had changed from the year before and found the following:

 

·                      There was an 8% increase in plans to consolidate debt

·                      There was a 6% increase in plans to obtain additional finance for their existing property

·                      There was a 9% decrease in plans to move to or purchase a different family home

·                      There was an 11% decrease in plans to purchase an investment property.

 

Montgomery says the dramatic shift over the last year in the mortgage environment has definitely created two distinct groups of borrowers – i.e. the concerned and the opportunist.

 

“It is clear that some borrowers concerned about job security and the potential impact on household income have changed their financial and investment plans accordingly,” she said.

 

“However, despite that trend we are still seeing some seasoned borrowers who have put themselves in a position where they’re comfortable and confident enough to take advantage of low rates and are using the opportunity to increase their overall level of investment in the property market,” she added.

 

Montgomery says every borrower needs to constantly review their own situation and if they are looking at making any significant changes they should take the time to speak to a range of trusted advisors and lending representatives about their options.

 

“There is no doubt these are extraordinary times as far as Australia’s economy is concerned – therefore any changes a borrower makes now to their financial plans has the potential to substantially affect their future. Take the time to look at all your options,” she said.

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