Australians are drowning in debt with one in five homeowners revealing they have taken on too much debt, according to shock new research.
As the RBA again held rates at 3.6 per cent at its December meeting — and will be for the foreseeable future — an overwhelming number of Australian homeowners are feeling immense pressure, admitting they’ve taken on bigger mortgages than they can handle.
Australian household debt has climbed to a record $3.33 trillion.
Hundreds of thousands of Australians feel their debt has become a bigger burden than they expected, according to data by Finder.
The Finder survey revealed about one in five Aussies say they have taken on too much debt — equivalent to about 627,000 Australians.
Australians have over stretched themselves to get into the property market with no rate relief in sight.
MORE: Named: Who bought Aus’ priciest homes
On top of this, 37 per cent said they struggled to pay their mortgage in November, according to Finder.
Home loans expert at Finder, Richard Whitten, said some borrowers have stretched themselves out of desperation to get into the market.
“Many Aussies who took out a loan at the top of their borrowing capacity are now finding themselves with a mortgage that’s pushing their budget to its limits,” Mr Whitten said.
“When you layer home loan repayments on top of everything else – groceries, energy bills, insurance and more – the costs quickly add up.”
Mr Whitten also said there was a real possibility of rates rising in 2026, and if that were to happen, those homeowners who are already stretched would feel that effect immediately.
Finder.com.au home loans expert Richard Whitten says Aussies who took out a loan at the top of their capacity are now struggling.
MORE: 100 listed: Areas you should buy into in 2026
“Higher repayments leave even less room to save or manage financial shocks,” Mr Whitten said.
He encouraged mortgage holders to try to get a better deal on their home loan.
“There’s never a bad time to refinance. If there are better offers out there, it’s a good time to switch.
“Shaving even half a per cent off your interest rate can save you thousands of dollars.”
The RBA held rates at its December meeting. Picture: NewsWire/Christian Gilles
Tips to getting a better deal from Finder
1. LOOK FOR A CHEAPER RATE
The lower the interest rate the more money you save. This is true for every borrower and it’s the first thing most refinancers look for. Even just a small difference in rates can end up saving you hundreds of dollars a year in repayments.
2. MAKE SURE YOUR LOAN MEETS YOUR NEEDS
You also need to refinance to a home loan that suits your needs. If you need a loan with an offset account, you want to avoid a basic loan that doesn’t have this feature. A package loan might look attractive, but it might have high annual fees and products you don’t need.
3. AVOID A LOAN WITH HIGH FEES
There are usually one or two fees with any new home loan. But the cost of fees can vary widely, from practically nothing to hundreds of dollars. It’s worth keeping loan fees in mind when preparing to refinance a home loan.
MORE: Sad future of last 90s Woolies stuck in time
English (US) · 