New research has found that 5 million Australian mortgage holders can only afford to pay on a month-to-month basis.
The survey by comparison website Finder polled mortgage holders, and found 48 per cent are struggling to make their repayments.
According to the survey, 40 per cent of mortgage holders are living on a month-to-month basis, while 7 per cent can barely make their repayments, and 2 per cent are behind in their repayments.
Graham Cooke, insights manager at Finder, said that financial hardship is a prevalent problem in Australia.
“Living month to month is a reality for millions of Australians, so if you’re in this situation, you are not alone,” Mr Cooke said.
“A good first step to easing mortgage stress is to see if you can get a better deal.
“Switching to a rate that is half a percentage point lower, like from 4 per cent to 3.5 per cent, could save the average Aussie more than $1,300 a year on their mortgage.”
Mr Cooke encouraged mortgage holders to attempt to find any kind of savings with the prediction of some experts that a larger economic downturn is coming.
“Nearly a quarter of our experts think we might be in for a recession so it’s best to hope for the best and prepare for the worst,” he said.
“Do an audit of your finances and see if there are places where you can tighten your belt for the better.”
This news follows expert opinion that momentum for a rate cut this year is likely following the Reserve Bank’s decision to leave the official cash rate on hold for April.
According to a Finder survey, 76 per cent of experts predict the next move by the bank to be a cut, and 24 per cent believe a recession within Australia was “somewhat likely”.