Mortgage Stress: What It Means for Homeowners and How Wild Finance Can Help

As rising interest rates continue to squeeze household budgets, the issue of mortgage stress has become a hot topic in the media. According to recent data from Roy Morgan, more than 1.6 million homeowners across Australia are now "at risk" of mortgage stress, with nearly 30% of mortgage holders struggling to keep up with their repayments.

For homeowners in areas like Sydney’s North Shore and the Hills District, where property prices are high and loans are substantial, mortgage stress can quickly become overwhelming. But, what exactly is mortgage stress, and how can you safeguard yourself? Let's dive into the current situation and how Wild Finance can help you navigate these tough times.

What is Mortgage Stress?

Mortgage stress occurs when homeowners spend more than 30% of their pre-tax income on home loan repayments. When interest rates rise, this burden becomes even heavier, leading to financial strain for many families. In recent months, the Reserve Bank of Australia (RBA) has kept the official interest rate at 4.35%. This has resulted in a significant increase in the number of homeowners facing mortgage stress—up by over 850,000 since May 2022.

Although there has been a slight improvement in recent months, with the percentage of mortgage holders at risk dropping slightly due to tax cuts, the outlook remains uncertain. With inflation still above the RBA's target range and key indicators like petrol prices remaining high, experts are warning that further interest rate increases could push more households into financial distress.

What’s Next?

Roy Morgan predicts that if the RBA raises interest rates further—up to 4.6% later this year and potentially 4.85% by November—the number of Australians at risk of mortgage stress could reach record highs. This would affect another 50,000 households, bringing the total to over 1.7 million, or more than 30% of mortgage holders.

While these predictions are concerning, it’s important to remember that mortgage stress is influenced by more than just interest rates. Household income, employment stability, and other financial factors all play a role. The good news is that Australia’s job market remains strong, which has helped to moderate the levels of mortgage stress over the last year. However, with further rate rises looming, it’s crucial for homeowners to review their financial situation and explore all options to alleviate mortgage stress.

How Wild Finance Can Help

At Wild Finance, we understand that rising interest rates and financial uncertainty can be stressful for homeowners. That’s why we offer a free, no-obligation review of your home loan every 12 months to ensure you’re still getting the best deal possible. With interest rates continuing to climb, now is the time to evaluate whether refinancing could ease your mortgage stress.

Refinancing your home loan could save you money on monthly repayments, lock in a lower rate, or give you access to additional features like offset accounts or redraw facilities. Our team at Wild Finance works with multiple lenders to find the best refinancing options tailored to your specific financial situation.

Feeling the Pinch? Let Us Help You

If you’re feeling the strain of rising interest rates and want to see if you’re eligible to refinance, don’t wait. Contact Wild Finance today and let us help you explore your options. Whether it’s securing a better rate or simply getting peace of mind about your financial future, we’re here to guide you every step of the way.

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