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New research has shown that 33 per cent of Australian mortgage holders believe they took on too much debt for their home, up 21 per cent in a year.
Data released by Finder, an Australian comparison site, has revealed a concerning rise in mortgage stress among Australian home owners, many of whom now feel they took on more debt than they can manage.
The recent survey of 331 mortgage holders found that one in three home owners believe they have borrowed more than they can comfortably handle – up 21 per cent from last year.
This figure equates to over 1 million home owners now saying they’re struggling to keep up with their repayments.
The findings also reveal a generational divide, with younger home owners facing the most strain. Nearly half of Gen Z respondents (46 per cent) reported they’re stretched thin, closely followed by 37 per cent of Millennials.
Meanwhile, 26 per cent of Gen X and 20 per cent of Baby Boomers say they’re also grappling with mortgage pressure.
These findings have disclosed that one in five (20 per cent) are now struggling with repayments due to borrowing more than they could afford. An additional 15 per cent acknowledged they have overpaid for their homes’ value, leading them to secure larger loans to cover expenses.
Finder’s home loans expert Richard Whitten explained that many Australians are forced to cut back on expenses or find new income sources to relieve the strain.
For those looking for additional ways to manage their mortgage stress, Whitten suggested reviewing monthly spending, exploring refinancing options, and even boosting income through side jobs or selling unused items.
“Households are desperately trying to cut expenses or boost their income to avoid financial strain, but this financial safety net won't last forever,” Whitten noted.
“The good news is that interest rates could drop in the next couple of months – which would be a huge relief for those who overextended themselves.”
Whitten recommended using tools like Finder Score to help mortgage holders assess if they could get a better deal on their home loans.
“If your home loan doesn’t start with a Finder Score of eight or nine, then you could be getting a better deal elsewhere,” he advised, referring to the score that ranks loan products on a scale from one to 10 based on value.
In the face of rising mortgage stress, Whitten suggested: “Take a fresh look at your situation and think about the best ways to alleviate mortgage stress.”
He also encouraged those facing financial difficulties to reach out to their lender about possible temporary solutions, such as interest-only payments or term extensions to reduce monthly costs.
“These options will cost you more interest in the long run, but can offer much-needed relief in the short term,” Whitten said.
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