Amidst another RBA rate hike in March, Australians are not only facing the looming threat of falling off the mortgage cliff but are also finding themselves trapped in a different kind of financial dilemma — a mortgage prison. Smart Property Investment’s Phil Tarrant and Finni Mortgages’ chief executive Paul Glossop acknowledged the increased pocket pain that borrowers are burdened with, thanks to the central bank’s continued monetary policy tightening in 2023. And while refinancing has become the go-to recourse for borrowers to deal with the blows, they shine a spotlight on borrowers who find themselves unable to switch lenders due to rate hikes negatively impacting their serviceability. On that note, they unpack the “moving parts” that impact a borrower’s serviceability and delve into possible solutions to escape (or prevent) being stuck in mortgage prison.
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