Finder survey highlights mortgage-income disproportion

A new survey conducted by Finder has found a concerning number of mortgage holders pay more than 30 per cent of their income to their home loan, exceeding the threshold to be considered under mortgage stress.

Of the 346 survey respondents who had a mortgage, 40 per cent of them pay 40 per cent of more of their monthly income towards their home loan. Approximately 30 per cent of respondents said they contribute 30 per cent of their pay towards their repayments.

Close to one-quarter (23 per cent) said they pay more than half of their income for their home loan.

“Mortgage holders are facing the highest home loan costs in decades, with four in ten being in mortgage stress,” Graham Cooke, Head of Consumer Research at Finder, 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.”

Cooke said optimism for interest rate cuts had renewed among mortgage holders, after several lenders including Big Four banks have reduced their fixed rates in recent weeks.

“If you’re seeking financial stability, budgeting ease, and immediate savings, fixing your home loan could be a worthwhile option,” he said.

“But if you’re doing it to purely save money, fixing your loan might backfire if variable rates drop dramatically in the near future.”