Grim figures highlight Aussie mortgage crisis

A shocking number of Australians are spending nearly a third of their income on mortgages, with new data revealing the grim reality facing homeowners across the country.

A Finder survey of more than 1000 Australians, including 346 who have home loans, has found up to 40 per cent are spending nearly a third of their income on their mortgage, which is the widely accepted threshold for mortgage stress.

Nearly one in four respondents also reported putting more than half of their income towards their mortgage.

Finder head of consumer research Graham Cooke said mortgage payments have “skyrocketed” following interest rate rises.

“Mortgage holders are facing the highest home loan costs in decades, with four in ten being in mortgage stress,” Mr Cooke said.

“For many households, mortgage payments have skyrocketed far beyond their initial expectations, following the 13 interest rate hikes that began in 2022.

“Many households are paying far more on their mortgages than expected due to repeated rate hikes.”

However Mr Cooke said there’s hope rates may soon drop after some major banks slashed fixed rates recently.

Commonwealth Bank last week dropped fixed and variable rates for new borrowers in line with other lenders.

Owner-occupier and investor fixed rates at the major bank have dropped by up to 0.70 percentage points for one, two, three and four year terms for new borrowers.

New customer variable rates were also been slashed by up to 0.35 percentage points.

A Commonwealth Bank spokesperson told NewsWire the reduction comes after an ongoing review of interest rates and market conditions.

“At CommBank we offer a range of tools and features to help customers manage their home loan,” the spokesperson said.

“For example, customers can use our budget planner tool to help estimate how they can manage their income and expenses to meet their goals.”

CBA followed Westpac, which also lowered owner-occupied and investment property fixed-rate loan prices.