Data reveals more than 100,000 extra homeowners expected to be under mortgage stress

More than 1.3 million Aussie households are now facing mortgage stress following the latest RBA interest rate hike.

Australians living in wealthy suburbs are starting to struggle with home loan repayments, as new data reveals the latest interest rate hike has put a further 100,000 households under mortgage stress.

The Reserve Bank on Tuesday lifted the official cash rate for the ninth consecutive time to 3.35 per cent, a jump from 3.1 in December and up from 0.1 in April last year.

The latest rate increase – and expectations of more – has left many people worried about how they’re going to meet their mortgage repayments.

Data released by financial services company Otivo reveals more than 1.3 million Australian households are now struggling.

More than 800,000 households are expected to be impacted as they come off fixed rate home loans in 2023. Picture: NCA NewsWire / Aaron Francis

Mortgage stress – when more than 30 per cent of a household’s income is spent on home loan repayments – is becoming a growing issue across the country.

Sydney residents living in Lakemba, Wiley Park, Fairfield, Burwood, Dulwich Hill and Auburn are more likely to face financial pressure following the reserve bank hike.

In Melbourne, the suburbs most struggling are Flemington, Kensington, Caulfield East, Malvern East, Balwyn, Deepdene and Altona.

Meanwhile, those living in the Brisbane suburbs of Ascot, Hamilton, New Farm, Teneriffe, Annerley, Fairfield, Ashgrove, Nundah and Wavell Heights will also be feeling the pinch.

The RBA last week forecast that more than 800,000 Australian households are likely to face financial pressure as many shift to more expensive variable rates in 2023.

More than a quarter of Aussies earning between $3300-$4644 a week a week (28 per cent) are now struggling with loan repayments.

Otivo founder Paul Feeney said owner-occupied homeowners with a mortgage of $600,000 households will need to find an extra $1625 a month to cover the repayments.

Otivo founder Paul Feeney says people should create a financial buffer to prevent future stress when paying their mortgages. Picture: Supplied.

“That’s a lot of money for every household going straight into the mortgage,” Mr Feeney told NCA NewsWire.

He said those more affluent suburbs which usually can afford interest rate hike variations are now feeling the pinch more than ever before.

“We’re seeing it across the board, the wealthier suburbs are also suffering, there’s a lot of leverage,” Mr Feeney said.

“The more wealthier suburbs have been creeping up the scale in the last six months, people are a lot more overstretched because people have taken out more loan.

“It’s because (those households are usually) a one income household.

“It’s also their mortgages are significantly higher, which means the dollar value is higher.”

RBA Governor Dr Philip Lowe lifted the cash rate for the ninth consecutive time to 3.35 per cent on Tuesday. Picture: NCA NewsWire / Gary Ramage

He said people should start thinking about ways now they can better financially prepare especially as the likelihood interest rates will continue to rise in the coming months.

“People who have the variable fixed rates, reach out to your lender and don’t put your head in the sand,” Mr Feeney said.

“They’ll help you through this because they don’t want to take your house so approach them proactively.

“Another tip is to look at your expenses.

“If you can reduce your expenses by five per cent, put that in cash savings and it’ll create a buffer for you to help with future rate rises.

“There’s also a lot of financial hardship loans, reach out to them.”

Originally published as Data reveals more than 100,000 extra homeowners expected to be under mortgage stress