Rising interest rates have forced borrowers to cut back, with new research showing that Australians have trimmed their non-essential purchases to deal with mortgage stress.
According to Finder, 45 per cent of households who have recently refinanced have reduced the amount they eat out, while 33 per cent have cut other non-essential expenses in a bid to save money.
Budgeting is also becoming more important, with 31 per cent of households starting to crunch the number on their spending, while 32 per cent have shopped around for cheaper alternative products.
Cancelling a holiday (19 per cent) and skipping meals (9 per cent) are some of the other tactics refinancers have implemented to cope with rising interest rates.
“It’s a very worrying situation for millions of households and is causing a huge disruption to people’s lives,” Mr Whitten said.
“Many Aussies are taking drastic action to avoid mortgage stress.”
Finder’s Consumer Sentiment Tracker shows 75 per cent of Australians were somewhat or extremely stressed with their financial situation last month.
This includes 84 per cent of mortgage holders, up from 76 per cent in September 2021.
Finder analysis of ABS home loans data reveals a record $22.1 billion worth of mortgages were refinanced in June.
Mr Whitten said Aussies were refinancing in droves as they struggled with serviceability.
“Refinancing can be a silver lining for homeowners in distress, and Australians are prepared to switch if it gives them more breathing room,” he said.
“Some are even refinancing to lengthen their mortgage on a similar rate to bring their monthly payments down.
“Now is the best time to shop around and find a better deal – an interest rate that might have been competitive a few years ago may no longer be the best fit today.”