Interest rate rises hit first home buyers and young families

According to the March 2010 Fujitsu Mortgage Stress-O-Meter, first home buyers and young families are the most likely to be hit with mortgage stress as the Reserve Bank continues to lift interest rates.

Interest rate rises and the increasing cost of living have pushed up the number of severely stressed households by 1.6% to 222,225 in March 2010 from 218,765 in February 2010.

According to Fujitsu Executive Director Martin North, new entrants to the property market will come under more pressure. North goes on to say that by December 2010, they estimate that "469,000 households will be in some degree of discomfort and those in severe stress perhaps as high as 267,000."

Fujitsu defines 'severe' mortgage stress as households who are behind in their home loan repayments and are forced to sell or refinance, while mortgage stress is defined as borrowing more on loans or repriortising expenditures to may payments.