Finder’s Housing Market Report: Australian homeowners limit spending to stay afloat
Spending has ground to a halt amid widespread mortgage stress, according to a new report by Finder.
Finder's Housing Market Report: Navigating Refinancing in 2023 – 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.
The report found 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 5 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.
Richard Whitten, home loans expert at Finder, said many mortgage holders have been wounded by 12 interest rate rises in 17 months.
"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."
Finder's Consumer Sentiment Tracker shows 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.
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.
"Refinancing can be a silver lining for homeowners in distress, and Australians are prepared to switch if it gives them more breathing room.
"Some are even refinancing to lengthen their mortgage on a similar rate to bring their monthly payments down.
"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," Whitten said.
|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%|
|Saw a professional to organise my finances||5%|
|Moved my child to a different school to reduce school fee costs||3%|
|Source: Finder's Housing Market Report: Navigating Refinancing in 2023 of 1,016 respondents who have refinanced or are planning to|
Read the full Housing Market Report here.