How to manage mortgage stress.

Mortgage stress occurs when homeowners struggle to meet their mortgage repayments, often when over 30% of their income goes towards their home loan. Rising living costs can worsen this situation, making it essential to understand and manage mortgage stress effectively.

Causes of mortgage stress

1. Interest rate changes - higher rates increase borrowing costs.
    
2. Job loss or reduced income - changes in employment can impact repayment ability.
    
3. Personal circumstances - events like illness or divorce can affect finances.
    
4. Housing market conditions - rising property prices can lead to larger mortgages.

Signs of mortgage stress

1. Difficulty meeting repayments - struggling to pay on time or using savings.
    
2. Cutting back on essentials - reducing spending on necessities.
    
3. Increased credit card usage - relying on credit for expenses.
    
4. Emotional stress - anxiety and sleeplessness due to financial worries.

Dealing with mortgage stress

1. Review your budget - cut discretionary spending and prioritise essentials.
    
2. Communicate with your lender - contact them early to discuss options like loan restructuring.
    
3. Increase your income - consider part-time work or renting out a room.
    
4. Review your mortgage - explore refinancing or switching to interest-only payments.
    
5. Seek financial assistance - look into government programs and financial counseling.
    
6. Consider downsizing or renting - sell your home for a more affordable one or rent temporarily.
    
7. Build an emergency fund - save for unexpected expenses.
    
8. Seek support - talk to family, friends, or use community support services.

Mortgage stress can affect any homeowner. Recognising the signs and taking proactive steps can help regain financial stability.

If you're experiencing mortgage stress, don't wait—reach out to one of our mortgage advisers today. Our experts can provide tailored advice to help you manage your finances and find the best solutions for your situation. 

Get in touch with us today to get started on the path to financial stability. Book a 10-minute chat or call us at 1300 780 440.