Australians Sacrifice Essentials to Manage Rising Mortgage Repayments
A recent survey conducted by Finder, involving 1,062 participants—346 of whom are mortgage holders—reveals alarming trends in how Australians are coping with escalating mortgage repayments. The survey indicates that 1 in 4 respondents (25%) have had to forgo other essential expenses to prioritize their housing costs, translating to approximately 825,000 mortgage holders facing cash shortfalls each month.
As of July 2024, the average home loan in Australia reached $641,143, marking a 1.1% increase from the previous month and an 8.0% rise compared to the same period last year. Finder's data highlights that 10% of borrowers have had to skip grocery shopping, while the same percentage admitted to missing meals to manage their growing mortgage obligations.
Other expenses that have been delayed include energy bills (7%), petrol (6%), and credit card payments (6%), as homeowners prioritize their mortgage payments. Richard Whitten, a home loans expert at Finder, commented on the distressing situation, stating, "Aussies are increasingly running out of money each month and have to choose which bills to pay and which to delay. When you're struggling financially, a roof over your head comes first, even if it means skipping bills or other important expenses."
Over the past decade, the average size of home loans across all Australian states has seen significant increases, contributing to the financial strain on households. Whitten added, "Mortgage debts are sky high, and the hard truth is that people's expenses exceed their incomes, leaving households very vulnerable."
He cautioned that missed and late payments on bills and utilities could negatively impact credit scores. "If you are worried you won't be able to afford a bill, contact your provider immediately. They may be able to arrange a payment plan or suggest other hardship arrangements. You want to minimize credit damage from late payments, so consider shopping around for a cheaper interest rate or switching to interest-only payments on your mortgage until your financial situation improves."
The survey also revealed that borrowers have missed payments on personal loans (3%), Buy Now Pay Later services (3%), and mobile phone bills (3%) to meet their mortgage responsibilities. Other missed payments included health insurance (2%), school fees for children (1%), home insurance (1%), and internet bills (1%).
Finder's Consumer Sentiment Tracker is a monthly survey that represents a nationally representative sample of over 60,000 respondents. The figures in this release are based on the responses of 1,062 participants—346 of whom have a mortgage—collected in June 2024. The Consumer Sentiment Tracker is owned by Finder and operated by Qualtrics, an SAP company, and has been conducted monthly since May 2019.