Owning a home has long been seen as a sign of stability. But for many Aussies, it’s now a source of pressure. According to Roy Morgan, as of March 2025, around 1.45 million Australians with a mortgage were struggling to keep up with their home loan repayments. That’s about one in four mortgage holders.
Behind those numbers are sleepless nights, unopened bills, and that constant worry about how you’re going to cover it all. Maybe your repayments went up more than you expected. Maybe it’s the ever-rising costs of life that you just can’t seem to keep up with. The reasons are countless, but one thing is for sure: it’s becoming too much for the average Australian family.
In this article, we’ll explain what mortgage stress is, what’s causing it, and how people are dealing with it in real life. If you’re feeling overwhelmed, you’re not alone, and there are ways to get support.
What Is Mortgage Stress?
Put simply, mortgage stress occurs when your home loan stops being manageable.
It’s skipping plans with friends because you’re short this month. It’s checking your bank app a little too often. It’s putting off groceries until after the mortgage clears. Not every week, maybe, but often enough to feel the tension.
For some, it hits when the savings dry up. For others, it’s borrowing just to make it through the week. You might still be making every payment, but you feel like you’re one unexpected bill away from everything unraveling.
It’s not always about poor choices. Sometimes, life changes faster than your pay can catch up. While interest rates remain high, hours get cut, groceries cost more than they used to, and suddenly, what once felt doable doesn’t feel like that anymore.
If any of that hits home, know this: it doesn’t mean you’ve failed. It just means your mortgage is stretching you further than it should. And noticing it is step one toward getting your balance back.
When Mortgage Repayments Take Over the Budget
You’ve probably heard of the “30% rule”. It’s the idea that you’re in financially risky territory if your mortgage takes up more than 30 per cent of your pre-tax income. But that line was crossed a long time ago, and in today’s rental market, it’s not even close.
In some parts of Australia, mortgage holders are now spending between 40% and 57% of their income just to keep up with the loan. Roy Morgan’s latest data backs that up by showing that over 1.6 million households are at risk of mortgage stress.
Families are cutting back on food, giving up outings, and dropping kids’ sports or after-school programs. Some are moving further out of town just to find something remotely affordable, even if it means a longer commute and less time at home. Others are relying on parents, delaying doctor visits, or hoping nothing else breaks this month.
And it’s not just the money that wears you down. When half your household income goes to the mortgage, it becomes a burden on your energy, your time, and your mental space.
If your loan is starting to crowd out the rest of your life, that’s a sign to pay attention to. Maybe you’re relying on credit more than usual, skipping bills, or dipping into your savings too often (if you have any to begin with).
But there are ways to ease the pressure, and you don’t have to wait until things boil over.
Why Holding Rates Isn’t the Relief It Sounds Like
The latest headlines might have caught your eye: “The RBA held interest rates steady“. No hike this month. But for a lot of people with a mortgage, it doesn’t feel like relief. Not yet, at least.
Here’s what’s happening: the Reserve Bank’s series of rate rises from 2022 to 2023 pushed the cash rate up to 4.35%. Even though it hasn’t gone higher lately, the impact of those earlier increases is still flowing through household budgets. Many borrowers are only now coming off ultra-low fixed-rate loans and landing on much higher variable repayments, sometimes double or more what they were paying before.
That sudden jump can mean hundreds or even thousands more per month, depending on the loan size. With the rising grocery prices, utilities, insurance, and fuel, the pressure can become overwhelming.
Meanwhile, wages haven’t kept pace. While there’s been some movement, income growth has been, at best, modest compared to how fast repayments and housing costs have risen. That difference between earnings and outgoings is what keeps so many Australians on edge, even when the cash rate holds. So if holding rates doesn’t feel like good news to you, you’re not imagining it.
If your mortgage is stretching you thin and other debts are making things harder, reach out to Debtbusters and let us help you find a way forward.
The Small Changes Helping Families Cope
Property prices might be rising, but so is resilience. All across Australia, families are making small changes that don’t make headlines, but they do help, at least by allowing people to stay afloat, day by day.
Some are getting creative with housing. Families are renting out in areas that work better for daily life while living in a more affordable property somewhere else. Others are moving in with parents or siblings or sharing the cost when it comes to rent, food, and bills.
Budgeting is no longer a ‘nice-to-do’ but something people rely on. Many households are cutting non-essentials, switching to lower-cost services, and using apps or spreadsheets to track where every dollar is going. When there’s nothing left on the weekly budget, food banks and local support centres help fill the gap during financial difficulty.
Lenders, too, have started offering support in some cases. Hardship programs and repayment pauses can give struggling borrowers breathing room, especially when requested early. Not forever solutions, but sometimes just enough to catch a break from the rental stress.
These changes don’t solve everything, but they’re a reminder that even when the numbers feel impossible, people are finding ways to adapt.
Can Things Get Better? Signs of Light Ahead
It might not feel like it right now, but there are a few signs that things could start to ease, bit by bit.
For starters, a lot of people still have a bit of a buffer, maybe from savings built up during the pandemic, or from making extra repayments when rates were low. Those little cushions are helping some households hang in there, even as costs stay high.
Inflation has also cooled off from where it was last year. It doesn’t mean life suddenly got a lot cheaper, but it’s changed the tone. If things keep heading in the right direction, the Reserve Bank could start lowering rates sometime in 2025. That won’t fix things overnight, but it could mean smaller repayments down the road.
There’s also the Stage 3 tax cuts coming soon. Depending on your income, they might bump up your take-home pay a little. Whether it’s a big change or a small breather, anything helps.
And in some industries, wages are finally starting to budge after years of standing still. Slowly, yes, but for families who’ve watched prices only go up while their income stayed the same, even that can make a difference.
Relief won’t come all at once. But it is possible. And it’s closer than it’s felt in a while.
What to Do When Mortgage Stress Starts to Take Hold
When mortgage stress is already taking a toll on your daily life, don’t panic. You have more options than you might think. And the sooner you act, the easier it is to get back on steady ground.
Talk to Your Lender First
It might feel intimidating, but lenders have to consider hardship requests. It’s part of their legal duty. You might be able to:
- Lower your repayments (at least temporarily)
- Pause payments to catch your breath
- Switch to interest-only for a while
These might be only temporary solutions, but they can buy you time to figure out what to do next.
Consider Refinancing
If your credit history is still okay, refinancing might get you a better rate or a more flexible loan. It’s not right for everyone, but for some, it can be a good call if the timing’s right.
Look at your full debt picture
Mortgage repayments might not be the only thing troubling you. If credit cards, payday loans, or Buy Now Pay Later debts are adding to the load, that’s worth tackling too. You can do that with:
- Debt Settlement: Negotiating a reduced payment
- Informal Payment Arrangements: A flexible, non-binding option
- Debt Agreements: A legally binding option to consolidate and reduce repayments
Lots of people wait too long to get help. Not because they don’t want it, but because they’re scared to ask. We get that. But reaching out doesn’t make you weak. It means you’re doing something about your situation.
At Debtbusters, we listen first. Then we help you figure out the next step—something that fits your life situation. Book a free call with us and let’s tackle your debt together.
You Still Have Options
Mortgage stress isn’t always a full-blown crisis. More often, it’s just a slow, constant pressure of higher repayments, savings that don’t cover things they used to, and tough decisions every time you shop for groceries.
We’ve covered a lot here: what mortgage stress looks like, what’s behind it, and what your options are when it feels like there’s no escape. If there’s one thing to remember, it’s this: you don’t have to wait until you’re underwater to ask for help.
Whether it’s working with your lender, cutting through debt, or just catching a break, there are ways forward.
At Debtbusters, we’ve helped thousands of people do just that. When you’re ready, we’re here. Reach out to us if you need support that makes sense for where you’re at.