High interest rates threaten to force 165,000 homeowners to sell
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Almost a million Australian homeowners could face significant financial stress if interest rates remain high until 2025, according to new research from comparison site Finder.
The survey of 1,012 respondents found that 27% of homeowners, equivalent to 891,000 people, are not prepared for interest rates to stay elevated until next year. More alarmingly, 5% of homeowners – approximately 165,000 people – reported they would have to sell their homes if mortgage rates remain high.
Sarah Megginson, personal finance expert at Finder, said many homeowners who expected rate cuts by now are struggling.
“Many homeowners are stretched so thin financially, they’re facing the prospect of having to sell their home, or they’re turning to loved ones for support with paying their bills,” Megginson said.
The research revealed various coping strategies homeowners are considering:
- 11% would need to move to an interest-only mortgage
- 4% would need to borrow money to afford repayments
- 3% would have to rent out a room in their house
- 2% would be forced to ask for a repayment holiday
Additionally, 46% of respondents have already reduced expenses elsewhere to compensate for higher mortgage payments, while 5% have taken on a second job.
Separate Finder research found that 21% of mortgage holders have refinanced their home loan internally in the past 12 months, with 14% doing so to secure a better interest rate.
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Megginson advised homeowners to review their budgets, look for savings on household bills, and communicate openly with lenders about hardship programs if struggling with repayments.
“Every bank has these hardship policies, so be upfront and transparent with them so you can get access to the best possible support,” she said.
The survey was conducted in May 2024 and included 292 respondents with mortgages.