mother stress
Findings suggest lockdowns have impacted mortgage stress. Image – Canva.
  • After hitting a low during July 2020, rent or home loan stress has been increasing
  • Recent lockdowns have exacerbated stress
  • Savings have also declined during the same time

The number of Australians who are struggling to pay their rent or mortgage payments is on the rise, according to a survey recently conducted by Finder.

After recording a low of 23% in July 2020, this figure has risen steadily peaking at 33% in May before setting at 31% last month.

Rent or home loan stress chart

loan stress
Source: Finder

Graham Cooke, Finder’s Head of Research, said it will be interesting to see how the national stress metric behaves in the short term given the swift lockdowns and unclear support across Australia.

“Australia’s financial stress regarding rent and mortgage payments has previously been going in the opposite direction than one might expect,” said Mr Cooke

“As COVID-19 payments kicked in during initial lockdowns, stress went down.

“This shows that the government payments were effective in relieving some of the financial pressure resulting from the first lockdowns – it remains to be seen what steps will be needed to help during this current one.”

Graham Cooke, Finder

Laing+Simmons’s Leanne Pilkington said that the stress caused by home loans is typically a result of buyers over-extending themselves or a change in circumstances.

“As long as due diligence is undertaken, buyers can be cautiously optimistic,” said Ms Pilkington.

Cash savings continue to decline

The findings come from Finder’s Consumer Sentiment Tracker (CST) which is the largest chronological consumer survey in Australia. Over the course of two years, the survey has engaged with more than 26,400 respondents.

The survey also found a decline in cash savings, despite the fact savings were on the rise for much of last year.

Average monthly savings chart

fidner savings
Source – Finder

After peaking at a monthly average of $953 in February, this figure remained around $800-$900 for several months before falling to $703 in June – the lowest level since March 2020.

Mr Cooke said this trend could be reflective of increased consumer confidence, he argued.

“It’s also possible the housing market boom has led more Australians to take on mortgages, leaving less money available for savings,” said Mr Cooke.

“However, this is a slightly disappointing result – I would have liked to see the increasing savings trend stick. This pandemic has demonstrated more than anything the necessity of having a financial safety net.”

You May Also Like

Westpac sees rates hitting 4.1 per cent and property prices falling further

Westpac said, “2023 will be another challenging year, particularly as the RBA continues to ratchet interest rates higher.”

Home loan hacks: four way to save money on your mortgage

With interest rates expected to keep rising, Compare Club has tips to ease the mortgage pain.

CoreLogic’s guide to navigating a looming ‘fixed-rate cliff’

Many borrowers will feel mortgage pain when they next refinance

How much does it cost to move house?

From cleaning fees to moving services, the costs of moving houses can add up fast