For many Australians, owning a home is the biggest financial commitment they’ll ever make. While buying a home is exciting, rising living costs and higher interest rates have made home ownership increasingly challenging for many families.

If you’ve found yourself worrying about your next mortgage repayment, you’re far from alone.

The good news is that mortgage stress doesn’t have to mean losing your home. There are options available, and the earlier you seek help, the more likely you are to find a solution that works.

Whether it’s speaking with your lender, reviewing your loan with your mortgage broker or accessing free financial counselling, taking action early can make all the difference.

Mortgage Stress Is Affecting More Australians

Mortgage stress isn’t just about missing repayments.

For many homeowners, it begins long before that. It can mean relying on savings to cover everyday expenses, using credit cards for groceries, delaying bills or feeling anxious every time interest rates are mentioned in the news.

Recent research from ASIC found that 47% of Australian adults with debt—around 5.8 million people—struggled to make loan or debt repayments during the previous 12 months, with rising living costs, reduced income and unexpected expenses being the biggest contributors.

More recent ASIC reporting also shows lenders received more than 152,000 home loan hardship notices during the first half of 2025, highlighting that financial pressure remains a reality for many Australian households.

Perhaps even more concerning is what borrowers themselves are saying.

According to Finder’s Consumer Sentiment Tracker (April 2026):

Almost one in ten mortgage holders (9%) say they would default on their mortgage if interest rates increased by just one or two more rises—the equivalent of around 297,000 Australian borrowers.
Three per cent (approximately 100,000 borrowers) say they are already at breaking point and could only withstand one more rate rise before falling behind.
A further 9% believe three additional rate rises would push them into default.
While 37% of borrowers believe they could manage another four rate rises, only 22% believe they could withstand five more, and 23% say six or more.

These figures paint a picture of two very different Australias. Some households still have healthy financial buffers, while many others are walking a financial tightrope with very little room left in the family budget.

Finder’s Money and Home Loans Expert Richard Whitten summed it up well:

“Many Australians are walking a financial tightrope and it wouldn’t take much to tip them over.”

Perth Homeowners Face Different Challenges

Western Australia has experienced one of the country’s strongest property markets over recent years.

Perth property values have continued to rise due to strong demand and limited housing supply. While rising property values are positive for homeowners building equity, they don’t necessarily improve monthly cash flow.

Many Perth buyers have entered the market during a period of strong price growth, meaning larger mortgages and higher repayments.

Even homeowners who purchased years ago may now be dealing with significantly higher repayments than they originally budgeted for, while also facing rising insurance premiums, council rates, groceries, utilities and childcare costs.

Mortgage stress isn’t determined by the value of your home—it’s determined by your ability to comfortably meet your repayments while still paying for everyday life.

What Does Mortgage Stress Look Like?

There is no single definition of mortgage stress.

While it’s often associated with spending more than 30% of household income on mortgage repayments, everyone’s financial situation is different.

You may be experiencing mortgage stress if you are:

Using savings to cover regular household expenses.
Relying on credit cards to pay for groceries or fuel.
Struggling to pay bills on time.
Constantly worrying about your next mortgage repayment.
Losing sleep over your finances.
Avoiding calls or emails from your lender.
Cutting back on essentials just to keep up with repayments.

If any of these sound familiar, it’s important to know you don’t need to wait until you’ve missed repayments before asking for help.

Your Lender Has a Responsibility to Help

One of the biggest misconceptions is that contacting your lender means they’ll immediately start foreclosure proceedings.

In reality, repossessing a home is almost always a last resort.

Lenders generally want to keep borrowers in their homes whenever possible. It’s better for everyone involved if a workable solution can be found.

Under Australia’s consumer credit laws, lenders are required to consider hardship requests from borrowers experiencing genuine financial difficulty.

Every lender has dedicated hardship teams whose job is to work with customers facing temporary or ongoing financial challenges.

The earlier you contact them, the more options you’re likely to have.

What Assistance Can Your Lender Offer?

Depending on your circumstances, your lender may be able to provide:

Temporary repayment relief

Reducing or pausing repayments for an agreed period while you recover from temporary financial hardship.

Interest-only repayments

Temporarily switching to interest-only repayments may reduce your monthly commitment while you regain financial stability.

Extending your loan term

Increasing the term of your loan may lower your monthly repayments, although it may also increase the total interest paid over the life of the loan.

Reviewing your interest rate

Many borrowers haven’t reviewed their home loan for years.

Your lender may be willing to reduce your interest rate if you ask, particularly if market conditions have changed.

Loan restructuring

Changing your loan product or repayment structure may better suit your current financial circumstances.

Financial hardship assistance

Where you’re experiencing genuine hardship, your lender may be able to offer a tailored arrangement based on your individual situation.

The key is to ask early.

Don’t Wait Until You’ve Missed Repayments

One of the biggest mistakes borrowers make is waiting.

Many people hope things will improve next month.

Others feel embarrassed about asking for help.

Unfortunately, delaying the conversation often limits the solutions available.

Richard Whitten from Finder encourages borrowers to seek assistance early.

“Speak to your lender as soon as possible if you’re struggling – there may be options available to help you stay on top of repayments. Refinancing or negotiating a cheaper rate could make a meaningful difference to your monthly costs.”

The best time to ask for help is before you’ve fallen behind—not after.

How Your Mortgage Broker Can Help

Many people think their mortgage broker’s role ends once the loan settles.

We’re here to support our clients throughout their home ownership journey.

If you’re feeling financial pressure, we can help by:

Reviewing your current home loan.
Negotiating a better interest rate with your lender.
Explaining your lender’s hardship options.
Assessing whether refinancing is appropriate.
Comparing alternative lenders if suitable.
Helping you understand the advantages and disadvantages of each option.

Sometimes the best outcome is staying with your current lender.

Sometimes refinancing can significantly improve your cash flow.

Our role is to help you understand your options so you can make informed decisions with confidence. Need to review your options? Book an appointment.

You Don’t Have to Face Mortgage Stress Alone

If you’re struggling, remember there is help available.

Your lender, your mortgage broker and independent support services all have an important role to play.

For free, confidential financial counselling, budgeting advice and advocacy, contact the National Debt Helpline on 1800 007 007 or visit www.ndh.org.au.

If you’re in Western Australia and experiencing mortgage hardship, Legal Aid WA’s Mortgage Hardship Service provides free assistance to eligible homeowners. They can help you understand your rights, negotiate with your lender and explore the options available to you.

Seeking help isn’t a sign of failure—it’s one of the smartest financial decisions you can make.

Mortgage Stress in Australia: How Your Lender Can – and Should – Help