Perfect storm: 35% spike in Aussies spending half their incomes on mortgages
New Mozo research reveals a 35% rise in the number of Australians spending half of their income on their home loans since 2023.
A nationally representative survey of over 2,000 Australians found that 1 in 5 (22%) mortgage holders are spending 40-60% of their income on mortgage repayments. This time last year, only 1 in 6 (16%) reported experiencing this level of mortgage stress .
Income spent on home loan 2023 vs 2024
|
% Income Spent
on Mortgage |
Mortgage Holders (2023)
|
Mortgage Holders (2024)
|
Yearly Change
|
|
0-20% of Income
|
35%
|
26%
|
-26%
|
|
20-40% of Income
|
43%
|
47%
|
+9%
|
|
40-60% of Income
|
16%
|
22%
|
+35%
|
|
60%+ of Income
|
5%
|
4%
|
-9%
|
The number of Australians who reported spending 0-20% of their income dropped by 26% over the past 12 months, while the cohort spending 40-60% of their income skyrocketed.
In 2024, a whopping 1 in 10 (9%) of Australians are now spending 50-60% of their income on home loan repayments.
It’s been dubbed the ‘ mortgage cyclone ’ – a perfect storm of the cost of living crisis, a high interest rate environment, and pandemic-era fixed rates coming to an end.
“Variable rate mortgage holders are still bearing the brunt of 13 rate hikes and many of those who were on low fixed rates have now come off into much higher variable rate territory,” says Mozo spokesperson Rachel Wastell.
Younger homeowners feel the heat more than their elders
The data reveals significant generational differences and highlights the growing financial strain younger Australians are facing when it comes to housing.
For Gen Z, the proportion of Australians spending 40-60% of their income on their home loan has doubled from 11% to 22% over the past 12 months.
The number of Millennials feeling the pinch grew by 39%, while the Gen X cohort grew by 42% since 2023.
“Rising mortgage costs are hitting most Australians hard, and while younger generations like Gen Z are feeling the pressure more acutely, the reality is that nearly everyone is struggling with increased financial strain,” says Wastell.
If your income is being wiped out by rising repayments, the first thing you should do is check your rate. If you’re paying an interest rate starting with a ‘6’ or ‘7’, you might be able to switch and save to a home loan starting with ‘5’.
The Mozo database still tracks a variety of variable rate home loans starting with a ‘5’, from Homeloans360’s Owner Variable Home Loan, at 5.89% p.a. (5.89% p.a. comparison rate*), to the CBA-backed Unloan Variable, at 5.99% p.a. (5.90% p.a. comparison rate*).
If you’re ready to see if you can switch and save, compare home loans today.