By JOHN VAN KLAVEREN
HOME repossessions in Geelong’s northern suburbs have risen significantly despite historically low interest rates.
Sherrif’s Office figures show delinquencies on mortgages in the 3214 postcode of Corio, Norlane and North Shore were running at 2.3 per cent in September, up from 1.5 per cent at the same time last year.
The local figures were part of an increase in mortgage defaults across Victoria, with six homes repossessed weekly.
The Sheriff’s Office executed 318 repossession warrants over the past financial year in Victoria despite interest rates falling from more than 4.5 per cent in October 2011 to 2.5 per cent since July.
Financial counsellors said job losses were the main reason for the spike in repossessions.
Consumer Action Law Centre chief executive Gerard Brody said the figures were “probably the tip of the iceberg of those who are struggling”.
“The large number of redundancies in Geelong affects the figures, when you consider Alcoa, Ford, Shell and Target.
“The ramifications of a significant event like losing a job are greater these days because the job market is less secure.
“A job is no longer for a lifetime, as more employees are on a casual basis or have intermittent work.
“People who were full-time employees 30 years ago now are contractors doing the same role but bear the risk of any decrease in work,” Mr Brody said.
“It makes financial management challenging, particularly with a mortgage being such a large financial commitment.
“It can happen to anyone if you’re locked into your income in order to pay the mortgage.”
Mr Brody said a low interest rates could tempt borrowers to take on mortgages without considering the possibility of future rate increases.
“New borrowers or those refinancing should think about the prospect of interest rate rises and factor that into their budgets. Some mortgage brokers put people into loans that look affordable with low interest rates but become unaffordable with interest rate rises.”
Mr Brody encouraged anyone in financial hardship to contact a financial advice service.
“Get on the front foot and talk to your lender. It’s too late if the sheriff is at the door.
“People do have rights under our credit laws for hardship assistance and can be offered assistance such as repayment holidays or reductions of interest.”
Consumer Action Law Centre’s MoneyHelp line is 1800 007 007.
