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By Leanne Spring

Australian home owners limit spending to stay afloat – new report reveals

It seems spending has ground to a halt amid widespread mortgage stress, according to Finder’s Housing Market Report: Navigating Refinancing in 2023.

The report which combines lending data with a survey of 1,016 Australians who have recently refinanced or are planning to – revealed homeowners are taking drastic measures to reduce expenses from skipping meals to cancelling holidays.

What actions, if any, have you taken to deal with your mortgage stress?
Cut back on eating out / getting delivery (e.g. Uber eats) 45%
Stopped / cut back on other non-essentials 33%
Shopped around for cheaper alternative products 32%
Set up a budget 31%
Cut back on beauty treatments / started doing them myself 23%
Cancelled a holiday 19%
Compared my other regular expenses on a comparison website to find better deals 12%
Skipped meals 9%
Saw a professional to organise my finances 5%
Moved my child to a different school to reduce school fee costs 3%
Other 1%
Source: Finder’s Housing Market Report: Navigating Refinancing in 2023 of 1,016 respondents who have refinanced or are planning to

It also found that almost half (45%) of respondents have cut back on eating out to deal with mortgage stress, while 1 in 3 (33%) have cut back on other non-essentials.

Shopping around for cheaper alternative products (32%), cancelling a holiday (19%), and skipping meals (9%) round out the top five tactics refinancers are implementing to cope with rising interest rates.

A small proportion (3%) have even moved their child to a different school to cut back on costs.

Many mortgage holders have been wounded by 12 interest rate rises in 17 months

Finder’s Consumer Sentiment Tracker shows that 3 in 4 Australians (75%) are somewhat or extremely stressed with their current financial situation in September.

This includes 84% of mortgage holders, up from 76% in September 2021.

Mr Richard Whitten, home loans expert at Finder said:

“It’s a very worrying situation for millions of households and is causing a huge disruption to people’s lives.

Many Aussies are taking drastic action to avoid mortgage stress.”

Further, Finder analysis of ABS home loans data reveals a record $22.1 billion worth of mortgages were refinanced in June.

Whitten said Aussies are refinancing in droves as they struggle with serviceability.

Mortgage Default

He further commented:

“Refinancing can be a silver lining for distressed homeowners, and Australians are prepared to switch if it gives them more breathing room.

Some are even refinancing to lengthen their mortgage at a similar rate to decrease their monthly payments.

Now is the best time to shop around and find a better deal – an interest rate that might have been competitive a few years ago may no longer be the best fit today."

About Leanne Spring Leanne is a highly experienced Buyers Agent in the Brisbane Real Estate market. Leanne became a passionate lover of property in 2001. Since then, both professionally and personally, she has been involved in all aspects of property including purchasing, negotiating, renovating, and selling.
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