If you’re experiencing mortgage stress, it’s important to understand the consequences of letting it go unchecked. Mortgage stress not only affects you financially, but contributes to physical and mental health problems, and even relationship difficulties. It’s important to seek help early and take action before things get worse.

Mortgage stress can come about for a number of reasons. Here are three of the most common causes that you need to pay attention to.

Interest rate increases. When interest rates go up, your variable rate mortgage monthly repayments will increase as well. In recent months, the Reserve Bank of Australia has been raising the cash rate to counter the rapidly rising cost of goods. As the cash rate has a direct relationship with interest rates, it is highly likely mortgage repayments have risen too. As of now, this is the primary concern for most mortgage owners and can be difficult to handle if you’re already tight on cash flow each month.

Job loss or reduction. If you or your partner lose your job or experience a reduction in income, it can seriously complicate your budget. This is why many financial experts tend to recommend keeping an emergency fund of at least 2-3 months of expenses that you can dip into when finding another source of income.

Unexpected expenses. Even if you’re currently employed and bringing in a steady income, unexpected expenses can quickly throw off your budget and leave you struggling to make ends meet. Things like car repairs, medical bills, or home repairs can all put a strain on your finances. Avoid the nasty surprise and keep note of all future payables and set aside cash early on.

If you are feeling the pinch of overwhelming inflation and rising mortgage repayments, know that you are not alone. Here are five ways to get back on track.

Keep track of your expenses and make sure you know exactly how much your mortgage payment is each month. Set aside that amount first and work with the rest to avoid any late payment penalties. It is crucial to understand all your cash inflows and outflows for the period as it will help you stay on top of your finances.

Once you know how much money you have coming in and going out each month, it’s time to create a budget. Sit down and figure out what expenses are necessary and which ones you can afford to cut. This will help you free up some extra cash to put towards your mortgage payment or towards savings. 

If you have some extra money coming in from a tax refund or bonuses at work, consider making an extra mortgage payment or two. Even if it’s just a few hundred dollars, this can help reduce your overall debt and take some stress off of your shoulders in the long run.

Interest rates are on the rise, but you may still be paying too much for your mortgage. Don’t be afraid to shop around for the best deal possible. Be sure to compare rates and terms before making any decisions and consider talking to a licensed mortgage broker so they can assist you with your loan.

If you’re feeling overwhelmed by your mortgage payments, don’t hesitate to reach out to your lender. They may be able to offer options that could lower your payments or give you some breathing room financially. Lending specialists at WLTH are always ready to help with your home lending needs, so don’t hesitate to reach out. If you’re going through a mortgage broker, ask about us too! For every settled loan with us, 50m² of beach and coastline will be cleaned up by our team alongside our partners, Parley for the Oceans.

Paying off your home loan is not always easy, but worthwhile for your financial future. Surround yourself with the right people that have your best interests in mind, and keep your goal top of mind. Remember, the property journey is a marathon, not a sprint!

Any advice provided is general in nature and should be considered in line with your financial situation, needs and objectives.