An expected interest rate hike this week would put 100,000 mortgage holders on the brink of defaulting, new research shows.
The Reserve Bank of Australia will hold its board meeting tomorrow and is expected to lift rates by 0.25 per cent to 4.35 per cent, with many economists forecasting it will go up again this year.
A survey by comparison site Finder shows one in 10 mortgage holders (297,000 mortgagors) would be unable to repay their home loan if they were hit by one or two more increases.
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Concerningly, 3 per cent (equivalent to 100,000 borrowers) say they could only absorb one more hike before falling behind.
A further 9 per cent of mortgage holders say three rate rises would push them over the edge.
The stark outlook comes as 75 per cent of experts from Finder's RBA Cash Rate Survey anticipate the cash rate going up tomorrow.
Last week's inflation data showing the consumer price index rising 4.6 per cent over the 12 months to March, up from 3.7 per cent in February, has convinced economists the RBA will be forced to lift rates.
While that was slightly lower than economists' expectations, it remains far higher than the central bank's target band of 2 to 3 per cent, and is the worst figure for three years.
Finder home loans expert Richard Whitten says mortgage stress is escalating.
"Many Australians are walking a financial tightrope and it wouldn't take much to tip them over.
"This research reveals how little buffer many households have left."
He urged mortgage holders feeling the pressure to act early rather than wait until they fall behind.
"Speak to your lender as soon as possible if you're struggling – there may be options available to help you stay on top of repayments.
"Refinancing or negotiating a cheaper rate could make a meaningful difference to your monthly costs."
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