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Borrowers driven to ‘desperate measures’ to meet repayments: Survey

Home owners are being pushed to extremes due to mortgage stress, a new survey has revealed.

A new survey from financial comparison site InfoChoice, the InfoChoice Real Hardship Survey, found that almost half of Australian borrowers were spending over 30 per cent of their household income on mortgage repayments.

The survey of 1,000 home owners found that 8 per cent of Gen Z borrowers (under 26) admitted to committing a crime to pay their mortgage, 28 per cent borrowed more money to meet repayments with 18 per cent borrowing from family, while 10 per cent sought out help from their lender or charity.

In addition, 26 per cent made late repayments, compared to less than 10 per cent for older generations.

Millennials recorded the most impact to family life, with 56 per cent seeking more income, 18 per cent ending up arguing with family, and 63 per cent cutting back on family activities.

For Gen X, 18 per cent said they had to pay a bill late and 13 per cent said they wouldn’t be able to afford a single mortgage repayment if they lost their job.

InfoChoice analyst Dominic Beattie said the survey was a “wake-up call” regarding stress from persistent rate rises.

“The biggest impact is clearly being felt by Gen Z borrowers, closely followed by Millennials and Gen X, with Baby Boomers largely escaping financial pain,” Mr Beattie said.

“This reflects the fact that younger home owners typically have larger mortgages due to the higher cost of housing and cheap interest rates available up until the start of the current tightening cycle.”

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Speaking on the financial pressure faced by borrowers, Treasurer Jim Chalmers acknowledged that Australians have been “under the pump” due to higher interest rates and climbing mortgage repayments.

“People are having to make difficult decisions about their household finances,” Mr Chalmers said.

“The government’s number one priority is taking the edge off some of these cost‑of‑living pressures without adding to inflation.”

RBA holds rates

While this data outlined the stressed and repercussions caused by 12 rate hikes, borrowers may find some relief after the Reserve Bank of Australia (RBA) decided to hold the official cash rate at 4.1 per cent, in its second consecutive rate hold since 2022.

RBA governor Philip Lowe said the higher rates are working to establish “a more sustainable balance between supply and demand in the economy and will continue to do so”.

[RELATED: Cash rate remains at 4.1% in August]

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