Mozo found mortgage repayments and groceries prices are causing the most financial stress
Amid the backdrop of rising interest rates and spiralling inflation, recent research from Mozo found almost two thirds (64%) of Australians are worried or extremely stressed and anxious about the cost of living.
It has also found mortgage repayments (17%), groceries (14%) and unexpected costs (14%) such as medical bills and car repairs are putting Australians under the most financial stress.
The research comes in the wake of the RBA’s first interest rate increase since November 2010 and the latest inflation figures from the ABS, which shows inflation at 5.1% well above the central bank’s target of 2-3%.
“With inflation spiraling out of control and a series of interest rate hikes on the horizon, it’s clear many households are starting to feel financial stress,” says Mozo spokesperson Tom Godfrey.
Mozo’s research also shows more than half (54%) of Australians are concerned about their level of debt and of those 15% said they will struggle to repay it.
“If you’re struggling with the cost of living and your debt is continuing to mount up, now is the time to take action. Whether you’re struggling with your mortgage, credit card debt or another credit product, get your credit provider on the phone and talk through your situation,” Godfrey says.
When it comes to how much money people have left in their budget before their next pay day, Mozo found just under a third (30%) have up to $200 and a quarter have up to $800 but worryingly 11% are in debt up to $100 each month and another 5% are in debt up to $500.
To deal with the rising cost of living, Mozo found the top things people will cut back on are eating out (47%), takeaway food (45%), entertainment (30%), clothing (28%) and food shopping (20%).
“Cutting back on discretionary spending can help you get your finances back on track but if costs keep rising, it’s important to try to identify how to reduce some of the bigger costs you face such as your mortgage,” says Godfrey.
Mozo found on an average $400,000 loan taken over 25 years, switching from the average variable rate of 3.21% to the leading rate in its database of 1.99% through Reduce Home Loans you could save $2,976 over the next 12 months.
To stress test your ability to make repayments at high-interest rates, check out Mozo’s home loan rate chance calculator.
Tips to reduce financial stress
Identify expenses you can reduce or cut out completely
Stress test your ability to make home loan repayments at higher interest rates
Switch to the best value personal finance products you can find
If you’re in financial hardship contact a financial counselor on 1800 007 007
