Determinants of mortgage repayment affordability among middle income household in penang

The affordable houses are offered in urban cities are beyond the accessibility of middle income households due to high cost of living and heavy debt. The common issue have been discussed on homeownership is the eligibility to access the financing. However, the ability to pay the mortgage installment while maintaining basic necessities is also another issue that needs to be given an attention too. Hence, to have deep understanding on homeownership issue, this study will explore a new perspective by reviewing the repayment affordability of house buyers. This study will examine the determinants of
mortgage repayment affordability among middle income households in Penang. The samples of this study comprising of middle income households who still pay for mortgage loans in the recent ten years. A total of 142 respondents have been chosen by using the convenience sampling to answer the questionnaires. Statistical Package for Social Sciences (SPSS) is use to run the analysis. The findings show that non-housing
expenditures are significantly affecting the mortgages repayment affordability of medium and long term house buyers. Whereas, housing expenditure only gives an impact on medium term house buyers. Hire purchase, food and non-alcoholic beverages, child expenses and personal loan variables show a significant influence of housing expenditure toward mortgage repayment affordability of the middle-income households in Penang. However, an analysis on the house purchasing period shows only food and non-alcoholic beverages, and hire purchase are significant and influence repayment affordability of the medium term of house buyers. On the other hand, four variables namely children expenses, hire purchase, food and non-alcoholic beverages and communication are significant to long term house buyers. This paper brings this issue to the forefront as an effort for future research and to engage the policy maker to be conscious of the importance of the non-housing expenditure in homeownership issue.