Unforgiving mortgages: 1 in 3 Australians are already struggling to repay

As many major lenders announce rate hikes, Australian homeowners are already feeling the pinch, according to new research from Finder.

Almost one in three Australian homeowners (28%) say they are struggling to pay their mortgage, according to Finder’s Consumer Sentiment Tracker in April.

Sarah Megginson, money editor at Finder, said we’ll likely see mortgage stress increase again in May and June as monthly payments increase.

“The last 2 years have seen a record number of buyers entering the real estate market, but many have not budgeted for a rainy day.

“If you’re having serious trouble paying your repayments, speak to your lender immediately – they may be able to restructure your loan to ease the pain.

“Refinancing your home loan is also one of the best ways to save money. Rising cash rates can be a good reason to lower your rate.”

The coffee riddle

Finder analysis shows it’s also getting harder and harder to save for a home deposit.

Prospective buyers in Sydney would have to forego 52,191 takeaway coffees to save enough for the average deposit.

That equates to one coffee a day for 143 years, nearly double the average lifespan.

How much should you give up to pay a deposit?

City Median house price # of coffees # years of Netflix # of bottles of wine # of restaurant meals # of gas tanks
sydney $1,116,889 52,191 1,694 13,961 11,169 1,867
melbourne $805,232 35,709 1,221 10,390 8,052 1,303
Brisbane $749,293 32,228 1,136 8,325 7,493 1,163
Adelaide $602,717 26,967 914 6,888 6,697 1,497
Perth $542,338 23 127 822 7,231 5,423 1,014

*Methodology below

Finder reveals home loan winners

Megginson said it was now more crucial than ever for homeowners to choose a home loan that would give them the best deal.

“We have just announced the gongs for the 2022 Finder Home Loan Awards – awarded to the best home loans in the market.

“Winners are chosen based on a range of factors, including fees, deposit size, whether the loan has a clearing account, and most importantly, a low interest rate.

“You don’t want to be so ‘housing poor’ that you can’t afford to have fun or travel because all your money is tied up in your mortgage,” Megginson said.

Megginson said the purpose of the awards is to demystify the thousands of home loans Australians have to choose from.

“Finder has done the heavy lifting for you by bringing together the best home loans on the market.”

This year, challenger home loan provider Reduce Home Loans won in 2 of 7 categories, including Best Investor Home Loan – 3-Year Fixed and Best Investor Home Loan – Variable.

Macquarie Bank also took home 2 wins, winning both Best Refinance Home Loan – Variable and Best Refinance Home Loan – Fixed, cementing its place as the expert in home loan refinance.

“The winners are further proof that some of the best deals in the market don’t necessarily come from the big bank around the corner,” Megginson said.

G&C Mutual Bank took home the award for Best Low Deposit Variable Home Loan while Beyond Bank rounded out the categories with a big win for Best Homeowner’s Home Loan – 3 Year Fixed.

Freedom Lend also won a homeowner’s mortgage – variable.

Best home loans 2022
Category Winner
Best real estate loan for investors – 3 years fixed Reduce Fixed Rate Wealth Maximizer Home Loans
Best Investor Mortgage – Variable Reduce Rate Slasher Home Loans Variable Home Loan
Best Low Deposit Variable Home Loan G&C Mutual Bank Momentum home loan
Best owner occupier mortgage – 3 years fixed Beyond Bank Total Home Loan Package – 3 Year Fixed Special
Best Homeowner Loan – Variable Freedom Lend Variable Home Loan
Best Refinancing – Variable Home Loan Macquarie Bank Compensatory Home Loan Package
Best Refinance Home Loan – Fixed Macquarie Bank Offset Flyer Fixed Rate Home Loan Package

*Methodology

  • Data sources include the following:
    • The average cost of a takeaway coffee, a bottle of wine and a restaurant meal in each city comes from Numbeo.
    • The cost of a Netflix subscription comes from Netflix.
    • The cost of gasoline comes from Petrol Spy.
    • Real estate price statistics are from CoreLogic.
  • Hypotheses:
    • The house prices shown for the suburbs are the weighted average of house and unit prices, based on the proportion of house and unit sales over the past 12 months.
    • Based on drive.com.au data, the average fuel tank is assumed to hold 62.9 liters of petrol.

Are you looking for the best mortgage offers on the market? Check out the winners of the 2022 Finder Home Loan Awards.

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