Six-figure earners struggling in cost of living crunch, brokers warn

Aussie families are now struggling on a household income which was once considered a high salary.

The ‘Aussie battler’ is alive and well - but their income looks a lot better on paper nowadays. Picture: Megan Slade

Families on six-figure incomes are struggling to make ends meet in the name of fulfilling the great Australian dream as household incomes are stretched to the absolute limit to cover living expenses.

Mortgage brokers in metropolitan and regional centres have expressed concern over the hapless grind middle class families are finding themselves in as a means of putting a roof over their heads – with some even needing to pause repayments or revert to interest-only instalments for a reprieve.

Broker Brett Sutton from Two Red Shoes in Penrith said he has seen a surge in Aussie families earning as much as $200,000-$250,000 who are still struggling to get by.

With cost of living so high, even $250,000 goes quickly.

“Many have bought homes in the suburbs — fulfilling the great Australian dream — only to find they can barely afford to put food on the table,” he said.

But while their six-figure income looks good on paper, by the time their mortgage, child care, groceries and other household expenses are deducted, there’s little left to get them through to the next week.

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Soaring rents have also prevented many struggling families from selling up, he said.

“This isn’t just about personal budgeting; it’s a structural problem that calls into question our entire financial system,” he said. “As a broker, I see families who’ve done everything ‘right’ by conventional wisdom — they got a solid education, landed a decent-paying job, bought a house in a ‘good’ area, and started a family — yet they’re just as anxious, worn out, and financially stretched as those on a far lower income.”

Two Red Shoes mortgage broker Brett Sutton. Picture: supplied.

Sydney and Wollongong-based broker Aaron Christie-David from Atelier Wealth said middle-income earners are being squeezed, yet because their income looks good on paper, they are suffering in silence.

“They’re feeling what I call a little bit ‘house poor’,” he said. “The cash flow isn’t there. I can see it in our community – most families would be on six figures. You can see they’ve pulled the kids out of swimming, they’ve pulled the kids out of anything that’s not essential.

“They’re beside themselves going, ‘where is this income going?’ It would have felt like a lot of money a few years ago.”

Managing director of Loan Market Geelong Sarah Thomson said she has seen a surge in six-figure income borrowers taking mortgage repayment pauses or reverting to interest-only repayments.

There’s a balance between life, work and finance that needs to be accounted for when buying a home.

“We’ve seen more pauses in that middle rung over the last one or two years than ever before,” she said. “They’ve got the (private) school fees or child care but they’re struggling and they’re putting their mortgages on hold instead.

“That’s the last thing they are going to stop – to take their kids out of their school.”

Sutton said housing affordability and the cost of living crisis has transformed the idea of the “Aussie battler.”

The cost of groceries has skyrocketed over the past couple of years. Picture: James Gourley/Getty Images

“They’re earning more on paper than their parents could have dreamed, and they own a house that’s skyrocketed in value. Yet, each week is a tightrope walk of balancing the credit card bills, grocery run, child care fees, and mortgage repayment,” he said. “They may not look like the ‘battler’ our parents remember, but they’re fighting every bit as hard.

“The time has come to acknowledge this reality, and for policymakers, lenders, and communities alike to find new ways to support these families.

“A society where even six-figure earners feel financially battered is a society in urgent need of change.”

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Originally published as Six-figure earners struggling in cost of living crunch, brokers warn