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Mortgage Crisis: 40% of Australian Homeowners Under Pressure

A recent study has uncovered that an alarming number of Australian households are grappling with mortgage burdens, as over 1.4 million families find themselves in financial distress.

This amounts to more than 40% of current home loan holders, according to new data from Finder, a consumer finance comparison service.

The latest survey results, gathered consistently by Finder since 2019, revealed the most elevated levels of mortgage stress witnessed to date.

Compounding this concern, approximately 13% of surveyed households admitted to having missed one or more mortgage payments in the last six months.

The persistence of overleveraging among families is a significant component of this issue. As of August 2024, the typical owner-occupier loan has increased to $634,479, marking a 1.3% rise from the previous month. Over the past 12 months, the average mortgage figure has escalated by 9.3%, Australian Bureau of Statistics (ABS) data reveals.

Despite the economy showing signs of stagnation, the cash rate has remained unchanged since November 2023, keeping it at its highest point in 12 years. As Finder highlights, this has resulted in Australians allocating a disproportionate segment of their incomes solely to cover home loan repayments.

Insights from ANZ CoreLogic indicate an upward trend in income allocation towards mortgage servicing. Australians now use over 46% of their income for new mortgages, compared to 40% the previous year. The scenario is more severe in Sydney, where it takes in excess of 58% of an average household's income to manage mortgage payments.

Financial counselors commonly advise that households should not channel more than one-third of their income into mortgage payments.

Adding to the challenge is the diminishing savings buffers for Australians over the past decade. The ABS’s latest National Accounts report highlights a severe decline in the household savings ratio, plummeting to 0.6%-a substantial drop compared to a year-back in June 2022.

“While many mortgage holders have navigated rate hikes up until now, they are currently under acute financial pressure as their savings and emergency funds rapidly dwindle,” observed Finder’s Richard Whitten.

Whitten further emphasized, “For a growing number of Australians, housing-related costs are a primary stress factor, with numerous households struggling to stay afloat.”

Published:Monday, 9th Sep 2024
Source: Paige Estritori

The information on this website is general in nature and does not take into account your objectives, financial situation, or needs. Consider seeking personal advice from a licensed adviser before acting on any information.

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Finance News

ANZ Faces Record $160 Million Fine for Regulatory Misconduct

17 Oct 2025: Paige Estritori

In a significant development within the Australian banking sector, ANZ Banking Group has agreed to pay a record A$240 million (US$159.5 million) fine for a series of serious regulatory breaches. This penalty, imposed by the Australian Securities and Investments Commission (ASIC), underscores the importance of stringent compliance and ethical practices within financial institutions. - read more

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The Coalition has announced plans to relax home lending rules if it secures victory in the upcoming election. This proposal aims to make it easier for first-time homebuyers to secure mortgages by adjusting the Australian Prudential Regulation Authority's (APRA) current serviceability buffer requirements. - read more

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17 Oct 2025: Paige Estritori

The Australian Prudential Regulation Authority (APRA) has recently removed the remaining A$500 million ($324 million) capital add-on imposed on Westpac Banking Corporation. This decision comes after the bank's successful completion of a comprehensive, multi-year risk transformation program aimed at enhancing its risk management frameworks and practices. - read more

Surge in Business Loan Applications Amid ATO Debt Rule Changes

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Small and medium-sized enterprises (SMEs) across Australia are experiencing a significant shift in financial strategy due to impending changes in tax debt regulations by the Australian Taxation Office (ATO). Effective from July 1, general interest charges (GIC) and shortfall interest charges (SIC) on tax debts will no longer be tax-deductible. With the GIC rate currently at 11. - read more

RBA Advises Caution on Borrowing as Interest Rates Set to Fall

09 Oct 2025: Paige Estritori

The Reserve Bank of Australia (RBA) has issued a cautionary statement to households, advising against excessive borrowing in anticipation of potential interest rate reductions. This warning aims to prevent the emergence of a boom-and-bust cycle that could destabilize the financial system. - read more

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