According to NAB’s latest Financial Hardship report which surveyed 2000 people, a quarter of Australians are becoming more and more concerned about making ends meet.
One in three identified money as a significant cause of stress in their lives, the NAB report revealed that the most common forms of difficulty wer not having enough money for an emergency (21%), not having enough money for food and basics (16%), and being unable to pay a bill (14%).
Furthermore, one in five said they had missed paying a bill in the past three months, with most being energy and water bills.
Financial difficulty was also found to be more common among those among younger age groups (18 to 29-year-olds and 30 to 49-year-olds).
Interestingly, despite rising interest rates, the report found that being unable to meet mortgage repayments was causing Australians the least amount of financial challenge (5%).
This may be due to borrowers drawing on the savings they accumulated during the pandemic to repay their mortgages or to the fact that many borrowers were ahead with their loan repayments.
Another reason is that many borrowers are still on fixed rate mortgages and have not yet felt the full brunt of the interest rate increases. This reprieve, however, will come to an end for a large number of borrowers in April/June when most fixed rate mortgages, taken out when interest rates were in the 2 to 3% range, come off their fixed rate term.
If a fixed rate is ending, ask the current lender for the new rate and repayment amount, then use a mortgage repayment calculator to update the household budget. If repayments may be unaffordable, contact the lender's hardship team early.
Borrowers who remain able to refinance can compare the full costs and new term involved in switching an existing home loan. For help reviewing the lending options, contact Smart Mortgage. A lower rate or approval is not guaranteed.