Managing Mortgage Stress

Mortgage stress occurs when housing costs consume unsustainable portion of household income.

What is Mortgage Stress?

Spending more than 30% of gross household income on mortgage repayments. Severe stress occurs above 50%. Rising interest rates have pushed many Australian households into mortgage stress.

Warning Signs

Financial:

• Struggling with minimum repayments
• Using credit cards for everyday expenses
• No emergency savings
• Delaying essential repairs
• Falling behind on other bills

Lifestyle:

Constant money anxiety

Avoiding social activities

Family tension over finances

Considering selling assets

Sleep disturbances

Immediate Actions

1. Contact Your Lender Banks have hardship programs offering:

Temporary repayment reductions

Interest-only payments

Loan term extensions

Repayment holidays

Do not wait until missing payments. Early contact shows responsibility. 2. Review Your Budget Scrutinize every expense:

Cancel unused subscriptions

Switch to cheaper providers

Reduce discretionary spending

Meal plan to cut food costs

Use public transport

3. Increase Income Consider:

Additional hours or overtime

Second job temporarily

Monetize hobbies or skills

Rent out spare rooms

Claim all eligible deductions

Medium-Term Solutions

Refinancing: Shop for better rates Debt Consolidation: Combine high-interest debts Loan Restructuring: Extend term to reduce monthly payments Offset Account: Maximize balances to reduce interest

Long-Term Strategies

Building Resilience:

Create 3-6 month emergency fund

Diversify income sources

Maintain good credit score

Review mortgage annually

Consider income protection insurance

Property Decisions: In severe cases:

Sell and purchase more affordable property

Rent out investment properties

Relocate to more affordable areas

Your home is important, but not worth sacrificing mental health and family wellbeing.

Where to Get Help

National Debt Helpline: 1800 007 007 (free counseling) Lifeline: 13 11 14 (crisis support) Legal Aid: Free or low-cost legal advice Financial Ombudsman Service: Dispute resolution Mortgage stress is increasingly common. Seeking help early provides more options and better outcomes.