Managing a mortgage at higher interest rates

Royle also noted that a mortgage of $1.1 million is a lot to take on, particularly for those with a young family.  It is important that new mortgage borrowers take their future plans into consideration before committing themselves financially, he said.

The two obvious ways to manage higher mortgage repayments are to either reduce outgoings,  increase income, or both.

Royle suggested that among the questions the homeowners could ask themselves is what alternatives are available to daycare (e.g. family assistance, whether it’s feasible and cheaper to have a live-in nanny), and whether family could chip in financially to spare them from being forced to sell.

Cutting back on negotiable spending such as gym memberships, Netflix and coffee can be hard for borrowers to do, but they are also not forever.

“It is to maintain the most important thing, which is to keep a roof over your head,” Royle said.