Mortgage stress is on the rise in Australia, with thousands of households now struggling to keep up with repayments. A recent Finder study revealed that 40% of mortgage holders are spending more than 30% of their income on home loans — the benchmark for mortgage stress.
Alarmingly, nearly one in four respondents admitted that more than half of their income goes directly towards loan repayments, leaving little room for everyday expenses or savings.
Why Are More Australians in Mortgage Stress?
According to Graham Cooke, Head of Consumer Research at Finder, the rapid increase in interest rates has had a devastating effect on borrowers.
“Mortgage holders are facing the highest home loan costs in decades, with four in ten being in mortgage stress,” he said.
Since May 2022, the Reserve Bank has implemented 13 rate hikes, sending repayments skyrocketing well beyond many households’ initial expectations. While some lenders have recently reduced fixed rates, providing hope of relief, variable rates remain high and continue to put pressure on families.
Should You Fix Your Rate?
Cooke explained that fixing a home loan may offer short-term stability but isn’t always the best solution.
“If you’re seeking financial stability, budgeting ease, and immediate savings, fixing your home loan could be worthwhile. But if you’re doing it purely to save money, it might backfire if variable rates drop dramatically in the near future.”
How to Manage Mortgage Stress
If you’re one of the many Australians struggling with repayments, there are practical steps you can take:
- Refinance your loan – Even a 0.25% lower rate could save hundreds of dollars a month. Compare refinancing options with Ratebuster.
- Cut back on expenses – Re-shop utilities, cancel unused subscriptions, and reduce discretionary spending like takeaway.
- Build an emergency buffer – Redirect small savings into an emergency fund to provide a safety net.
According to ABS data, household debt remains at record highs, making it crucial for borrowers to take proactive steps to protect their finances (ABS source).
Final Thoughts
Mortgage stress is unlikely to disappear overnight, but taking action now can ease the pressure. Whether it’s refinancing, budgeting smarter, or seeking professional advice, small changes can make a big difference.
👉 Start today by using Ratebuster’s free tool to compare home loans and find a rate that helps you save.
