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In order to either confirm or dispel myths about millennials and home ownership, we surveyed 22 millennials about their financial situation. This is part 3 of the series. To read parts 1 and 2, click here.
The average monthly loan payments for our millennials is $1960, however they range from $700 to $3700. Many of the people questioned did not find it difficult to meet the minimum repayments, and regularly paid more off their loan than required. However interest rates are currently at record lows. When asked if they would struggle to pay a higher monthly mortgage if interest rates increased, most answered yes. Some comments included:
- "It would make it tricky, especially if we go down to single income. But this is why we are trying to get as far ahead as possible in case interest rates rise and to pay it off as quickly as possible"
- “I would have to go back to work.”
- “May have to move in with other family and use house as a rental again.”
- “It would reduce my available cash flow.”
- “That would certainly affect our budget and affect how much money we can save.”
Although rising interest rates would affect the cash flow of these home-owners, it seems that many are aware of the situation and are paying additional amounts now, to help if and when interest rates rise in the future.
