Aussies struggle as home loans eat up paychecks.

Many homeowners are facing a tough situation as their mortgage payments continue to consume a larger portion of their household income. According to new research from Finder, a staggering 40% of mortgage holders are putting more than 30% of their earnings towards their home loans. This is concerning as 30% is considered the threshold for mortgage stress, according to Finder's standards. Even more alarming is the fact that almost one in four respondents are spending more than half of their income on loan instalments.

Graham Cooke, the head of consumer research at Finder, attributes this financial struggle to the recent rise in interest rates. He explains, "Mortgage holders are feeling the strain of the highest home loan costs seen in decades, with four in ten facing mortgage stress." This means that for many households, their mortgage payments have far exceeded what they initially anticipated due to the 13 interest rate hikes that began in 2022.

However, there may be a glimmer of hope for these struggling homeowners. Some big banks have recently lowered their fixed interest rates, leading to optimism that rates may soon drop. Cooke advises, "If you're looking for financial stability, budgeting ease, and immediate savings, fixing your home loan could be a viable option." He also warns that fixing a loan solely for the purpose of saving money may backfire if variable rates drop significantly in the near future.

In the face of these financial challenges, Cooke urges people to seek better deals on utilities and cut back on other expenses. He notes that even small savings can add up and make a significant difference at the end of each month. He also suggests cutting down on discretionary spending, such as takeaway meals, and redirecting those savings towards an emergency fund.

In addition, those looking to stay informed on the latest news, celebrity updates, and sports updates can follow Finder's WhatsApp channel. This platform offers a private and secure way to receive updates without any comments or algorithms. It's a great way to stay connected without compromising your privacy.

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