The festive season is quickly turning into a financial cliffhanger, as households choose between presents under the tree and keeping the bank at bay.
New research from Money.com.au finds more than half of Australia’s homeowners say the festive stretch is too tight to comfortably manage both their mortgage repayments and Christmas spending this year, underscoring how far household budgets have been squeezed.
Among those under pressure, 37 per cent plan to cut back on Christmas costs to stay on top of their home loan.
A further 10 per cent expect to lean on credit cards or buy now pay later to get through December.
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A smaller cohort is confronting the risk of slipping behind, with 4 per cent fearing they may miss a repayment and 1 per cent preparing to take a repayment holiday or seek hardship support from their lender.
Money.com.au’s Mortgage Expert, Debbie Hays, says many households are entering the festive season with rising costs and mortgage pressures hanging over their heads.
“Christmas is generally a great time for families, but for mortgage holders it’s equally a financial stress test,” she says.
New research from Money.com.au reveals that more than half of Australia’s homeowners (52%) will struggle to afford both their mortgage repayments and Christmas spending this year.
“Even with the RBA cutting rates this year, many homeowners will have to make a trade-off between keeping up with their mortgage and maintaining their usual level of festive spending. Christmas is often difficult to cut back on when kids, family traditions and social pressures are involved.
“Some mortgage holders will simply scale back their Christmas spending, while others will rely on credit cards or BNPL services, or in some cases seek support from their bank.
“Lenders can receive more hardship requests during the Christmas season due to increased spending pressures.”
The survey found that only 49 per cent of homeowners can comfortably afford both Christmas and their mortgage repayments this year.
Gen Z (61 per cent) and Baby Boomers (57 per cent) are more likely to struggle to afford both Christmas spending and their mortgage.
Gen X and Millennials like Sarah Falls, are expected to be hardest hit when it comes to financial choices this Christmas. Picture: TikTok
Ms Falls, an influencer and mum-of-three grew tired of spending thousands of dollars on Christmas presents for her kids, only to see them lose interest in the toys just days later – so she bought them in a thrift shop instead. Picture: TikTok
This is followed by 52 per cent of Millennials and 46 per cent of Gen X who report the same.
It means some people will be forced to go thrifting for Christmas presents this year, with influencer and mum-of-three, Sarah Falls, making headlines on the subject last year.
With a budget of $150 for all her kids, Falls documented her thrift shopping adventures on TikTok for her 23,000 followers and was “surprised” by the treasures she found.
“My kids don’t go without. They are very lucky. I wanted to go against the norm and be more sustainable while supporting not-for-profits,” the Northern Territory mother told news.com.au.
Five tips on how to juggle your mortgage and Christmas spending
1. Prioritise your mortgage repayments
Make sure you can cover your mortgage repayments in December and January 2026 before you consider how much to spend at Christmas. Defaulting on your home loan – even once – can trigger fees and damage your credit score, and it may make refinancing much harder down the track.
2. Review your home loan rate
If it’s been more than a year since your last rate review, it’s worth speaking to a broker. Getting a lower rate on your mortgage could bring your repayments down and free up extra cash flow. Debbie says brokers often have direct relationships with lending teams, which can help them negotiate sharper rates and faster approvals before Christmas on your behalf.
3. Be cautious with credit cards and BNPL
Using credit cards or BNPL to get through Christmas can create longer-term financial stress. If you do rely on them, set clear repayment limits and avoid stacking multiple BNPL services at once. BNPL services are now treated as credit products, which means any missed payments may affect your credit score.
4. Talk to your lender early if you’re struggling
Banks have hardship teams that can temporarily adjust your repayments or offer alternative arrangements. Speak to your lender as soon as you think you won’t be able to meet your repayments, even for a short period. The earlier you reach out, the more options you’ll have. This may include deferring your repayments or making reduced payments for a short time. A temporary hardship arrangement will not affect your credit score.
5. Ask for a repayment holiday
Some home loans allow you to pause or reduce repayments if you’ve previously made extra repayments. If your mortgage offers this feature, it could provide temporary relief during the festive season. Just keep in mind that interest keeps accumulating during the break, which could add to your overall loan cost.
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