Almost one in three Australian homeowners will use their tax cut windfall announced in the May budget to help pay off their mortgage, according to research commissioned by Wizard Home Loans.
The federal government announced more than $31bn of tax cuts across the next four years. This means an income earner on $30,000 will get a tax cut of approximately $21 a week from 1 July this year.
The survey, taken in the two days immediately following the federal budget announcement, revealed that financial priorities are top of mind with Australians, with saving for a rainy day and reducing credit card debt coming in a close second and third behind paying off the mortgage.
Wizard Home Loans chairman Mark Bouris said the results show Australians are placing greater importance on getting their household balance sheet in check as opposed to splashing out on consumer items.
"Australian homeowners have experienced eight consecutive rate rises, so it's little surprise that burrowing $21 a week into their mortgage will offer them some peace of mind," Bouris said.
The survey also revealed that 66% of respondents believe that interest rates will rise again before the end of the year.
"Given there's obvious concern among homeowners that rates will rise again, they're taking the responsible road and learning to become savers rather than spenders," Bouris said.
"The survey is an honest assessment of how people feel about their financial situation - they're cautious and ready to make sacrifices."
Bouris said that on a mortgage of $350,000, an extra $21 a week would reduce their loan term by nine years, and would save more than $197,000 in interest payments over the life of the loan.
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