First-home buyers pack on the debt
By MATTHEW TORBIT - The Dominion Post | Saturday, 7 April 2007
Greater numbers of first-time homebuyers are struggling to make ends meet as they take on mortgages that stretch their incomes to the limit.
Family welfare and financial support groups say first-home buyers are loading themselves up with debt and are needing outside help to pay bills.
Studies indicate home affordability has sharply deteriorated since 2003, with 75 per cent of the average income now needed to finance the cost of the national average home.
In 2003, the average cost to finance a home was 43.5 per cent of the average Kiwi's take-home pay.
Citizens Advice Bureau social policy manager Louise May said utility bills and food budgets would be the first to feel the pinch when loan repayments became too much. There had been a surge in those seeking help to pay bills in recent years, but she was unable say how much was related to mortgage debt.
Banking ombudsman Liz Brown said banks had a legal obligation to lend responsibly, and most home-loan-related complaints her office received were from people who had been refused loans.
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