Mortgage mayhem: Nearly 1 in 3 home loans are in arrears

10 March 2021, Sydney, Australia – The property market might be booming again, but a worrying number of homeowners are in financial strife according to new research by Finder, Australia’s most visited comparison site.  

A new Finder survey of 446 Australian home loan customers has revealed that approximately 31% of mortgages are currently in arrears – that’s equivalent to 899,000 home loans that are behind on payments.  

Almost 1 in 5 (18%) mortgages are in arrears by 30 days or more, 8% by 60 days or more, and 5% are considered “seriously delinquent” as they are behind by 90 days or more.  

Yet the remaining 69% of home loan customers say they are up to date with their mortgage repayments. 

Sarah Megginson, a home loans expert at Finder, said that while virus cases are dwindling, the effects of the pandemic are still being felt. 

“COVID-19 put a lot of households in a precarious financial position. 

“Some people are still without work or underemployed and aren’t earning enough to cover their monthly living expenses – including their mortgage. 

“Many people are also concerned about what will happen to their finances once the JobKeeper subsidy is wound back at the end of the month. 

“With some homeowners now only a few missed mortgage payments away from potentially having their homes repossessed, this is no doubt a scary time,” Megginson said. 

The research also found that South Australia has the greatest number of mortgages in arrears (41%), followed by Queensland, where over a third of mortgages (36%) are behind on payments. 

Men are much more likely to be behind on their mortgage repayments than women – 80% of female homeowners are up to date with their repayments, compared to just 59% of men. 

Megginson urged struggling mortgage customers to contact their lender as soon as possible.

“If you’re falling behind on your repayments, don’t put your head in the sand. The earlier you get help, the more options you’ll have. 

“Contact your bank or lender and talk through your financial hardship options – all home loan providers have customer support teams ready and waiting to help. 

“You might be able to switch to interest-only payments for a set period of time or defer your loan for a number of months while you catch up. 

“Taking that first step can be intimidating, but you’re much better off facing the issue head-on initially, rather than letting it unravel any further,” Megginson said. 

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