Rising fuel costs a bigger worry over rising mortgages?

[color=green:04a3ef3091][b:04a3ef3091]Fuel biggest money worry [/b:04a3ef3091][/color:04a3ef3091]
25 May 2006
By MATTHEW TORBIT

Soaring fuel costs are now considered the biggest stress on the family budget, despite a looming rise in home loan interest rates for nearly half of all mortgagees, a survey has found.

Of the 1500 home owners questioned in a survey commissioned by Wizard Home Loans, only 17 per cent said the official interest rate rise in December has had a greater impact on their wallets than the cost of gas. In December a "bubble" of two-year fixed term mortgages ? worth $36.5 billion or 42 per cent of the market ? is expected to expire. The bubble was the result of a 2004 price war ? which saw the two-year fixed rate fall to 6.9 per cent.

Customers refixing mortgages face increases in their repayments, with interest rates now ranging from 8.4 per cent for one-year fixed to 7.65 per cent for a five-year term.

Massey University director of banking studies David Tripe said based on a $200,000 mortgage repaid over 20 years, an interest rate jump from 6.9 per cent to 8.4 per cent would push up weekly repayments by around $50. "But I expect there to be some positioning by the banks and I wouldn't be surprised if there's another price war."

In the homeowner survey, conducted in March, around 70 per cent said increases at the pump had driven changes in their spending, while 26 per cent said they were spending less on luxuries. The survey also found 18 per cent were walking more, while 7 per cent had started using public transport.