Mortgage stress is commonly defined as a household spending more than 30 per cent of their (pre-tax) income on home loan repayments. It is estimated that 948,000 mortgage holders (21.1%) were at risk, and another 611,000 (14.1%) were at extreme risk of mortgage stress in the three months to September 2022.

If you are currently finding yourself with mortgage stress, here are some things that may help you. 

1. Check if over you’re spending. Are there obvious spending habits you may be able to reduce or cut out? Check over your subscriptions and work out if you may be able to limit some. Example, entertainment subscriptions like Netflix, Stan, Disney +. Do you use the platform enough to be worth those repayments? 

2. Consolidate your debts onto your mortgage. Do you have a car loan or personal loan with high repayments? You could save a few hundred dollars per month by consolidating your personal loans onto your mortgage. How does this work? As long as you have enough equity in your loan to cover the extra cash and have enough income to be able to service the increased mortgage loan, you will be able to consolidate it to your mortgage. Talk to Beth at Grace Loans about your scenario. She can structure the loans to be separated in the one loan, so you can keep track on how much is owing on the consolidated portion.  

3. If you don’t already have a budget, create a budget. Prioritise the musts – Bills and Loan repayments, Groceries, Fuel etc. Then allow the rest of the budget to fund other expenses – Entertainment, Dining out etc. Allow yourself a buffer, incase of any extra spending's or incidentals. 

4. Downsize your home and purchase a cheaper property. We understand this is not ideal for everyone, but to downsize your home and buy something cheaper, will allow your loan repayments to be cheaper. 

5. Check if there are cheaper interest rates available. Contact Grace Loans! Here, we can compare competitors products and interest rates. We can help discuss with you, your plans, and find you the most suitable product to suit your needs. 

6. Speak to a financial advisor. If you wish to speak to a financial advisor, let us know! We can refer you to financial advisor we work closely with. 

Not all these options may benefit you completely and may come with fees and costs. Contact Grace Loans on (02) 4905 0250 to discuss if there may be any options that will benefit you. 

-E