One in eight mortgage holders have missed a payment: Finder survey

New Finder survey reveals the record interest rate increases over the past 10 months have left households struggling with the growing outlay.

Finder’s home loans expert Richard Whitten said mortgage stress in Australia is growing to ‘worrying’ levels. Picture: News Corp

Massive increases in mortgage costs over the past 10 months have caused one in eight homeowners with a loan to miss repayments.

A new survey by mortgage financial comparison site Finder.com.au revealed 13 per cent of mortgage holders have missed a repayment in the past 6 months, equivalent to 429,000 households. Of those, 7 per cent had missed just one payment, while 6 per cent had missed multiple.

Finder’s home loans expert Richard Whitten said mortgage stress in Australia is growing to “worrying” levels.

“Nine consecutive rate hikes from the RBA means an Australian with the average loan size of around $600k will be paying roughly $1,000 more per month compared to what they were paying in April last year,” Mr Whitten said.

“Households are really struggling with the monthly outlay and some just can’t keep up.”

The survey results come after nine consecutive interest rate rises since May, which caused interest rates to rise 3.25 per cent – the fastest tightening cycle in three decades. In that time, the monthly repayments on a $600,000 mortgage have climbed by more than $1,000.

Rate rises were the leading reason why more than a third of respondents (37 per cent) had missed their payments, with one in four (26 per cent) admitting it was because they had run out of money after paying other bills. Forgetfulness was behind 33 per cent of missed payments.

Last week, the Reserve Bank flagged more increases were likely as it tries to bring record levels of inflation under control. One in seven (15 per cent) homeowners said they think they will miss a repayment in the next 6 months if their mortgage costs rise any further.

A small proportion of mortgage holders (2 per cent) have already asked their lender for a repayment holiday or applied for hardship.

Mr Whitten said many Australians are struggling to keep up with the growing outlay as mortgage rates creep up too quickly.

“With mortgage rates shooting over 5 per cent in 2023, Aussies who had been diligently servicing their monthly repayments are finding it harder to do so,” he said.

“With further rate hikes predicted – things could be about to get worse.”

Homeowners who bought at the top of the boom are finding themselves stuck in an uncomfortable predicament. With the 3 per cent buffer used by the banks to assess a buyer's ability to pay now completely eroded, those who have found they have overextended themselves are unable to sell as prices in nearly half of all suburbs around the country have slipped more than 10 per cent.

A total of 1,054 people responded to Finder’s survey, 313 of which had a mortgage.