Mortgage holders are at breaking point as loan payments swallow more and more household income.
New research by Finder showed 40 per cent of mortgage holders put more than 30 per cent of their earnings toward their home loans.
Thirty per cent is the widely accepted threshold for mortgage stress, Finder said.
And 23 per cent – almost one in four – of respondents spent more than half of their income on paying loan instalments.
Finder head of consumer research Graham Cooke said soaring interest rates had dealt a hard blow to households.
“Mortgage holders are facing the highest home loan costs in decades, with four in ten being in mortgage stress,” he said.
“For many households, mortgage payments have skyrocketed far beyond their initial expectations, following the 13 interest rate hikes that began in 2022.”
“If you’re seeking financial stability, budgeting ease, and immediate savings, fixing your home loan could be a worthwhile option,” he said.
“But if you’re doing it to purely save money, fixing your loan might backfire if variable rates drop dramatically in the near future.”
Record breaking suburb sales over the past 12 months
Cooke urged people struggling with loan repayments to seek better deals on utilities and cut other expenses.
“Small savings can add up significantly, making a big difference at the end of the month,” he said.
“If possible, cut down on all discretionary spending such as takeaway and divert those savings to an emergency fund.”
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