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Borrowers feel the pinch of mortgage choices
Hundreds of thousands of Australians have been regretting their mortgage choices, feeling they’ve taken on more debt than they can chew.
New data has revealed that hundreds of thousands of Australians have been rethinking their home loan choices, with 1 in 5 people feeling they have taken on too much debt.
A new Finder survey of 1,010 respondents – 297 of whom had a mortgage – revealed 627,000 respondents (19 per cent) believed they borrowed too much on their home loan.
According to the Consumer Sentiment Tracker, 37 per cent of homeowners said they struggled to pay their mortgage in November.
The data followed the Reserve Bank of Australia’s (RBA's) decision to hold interest rates at 3.60 per cent in December due to persistent inflation.
Following the RBA decision, borrowers are unlikely to see further mortgage relief anytime soon, with governor Michele Bullock confirming no cuts are expected in the near term.
REA Group senior economist Eleanor Creagh said that despite the RBA’s hesitation to apply another cut in December, this year’s 0.75-point decline had boosted borrowing capacity and fuelled confidence.
“Earlier cuts and stronger confidence continue to support buyer demand, aided by population inflows and the expansion of the Home Guarantee Scheme,” she said.
Finder’s senior money editor Richard Whitten said many Australians who had taken out a loan at the top of their borrowing capacity were left struggling with a mortgage beyond what they could handle.
“When you layer home loan repayments on top of everything else – groceries, energy bills, insurance and more – the costs quickly add up,” he said.
“Home owners are having to make some tough decisions – cutting back on essentials, dipping into emergency savings, or postponing major life plans just to keep up with their repayments.”
Whitten said that if interest rates were to rise in 2026, those already struggling with debt would be immediately affected, as higher repayments leave less room to save or manage financial shocks.
To avoid mortgage regret, Whitten encouraged borrowers to seek a better deal on their home loan, saying that cutting even half a per cent off their interest rate could save them thousands.
“If your home loan doesn’t start with a Finder Score of 8 or 9, you’re probably paying too much,” he said.
“Our team has evaluated various products in our database, rating products with a score out of ten, with higher scores indicating better value,” he concluded.