A survey by Finder revealed more than one in five home owners (21 per cent) admitted they borrowed too much on their home loan that equates to 693,000 households that have taken on too much mortgage debt.
As interest rates continue to climb, the number of households in financial distress is growing.
Finder analysis showed the average home loan rate has almost doubled from 3.45 per cent in April 2022 to 6.15 per cent in November.
The average monthly repayment has grown nearly $1,000 from $2,231 to $3,128 based on a $500,000 home loan.
That’s an annual increase from $26,772 to $37,536 in just eight months, with further increases predicted.
Sarah Megginson, money expert at Finder, said those who didn’t factor in rate rises could be feeling a lot of financial pressure now.
“Many Australians bought property during a record low interest rate environment and didn’t plan for what they’d do if rates went up,” Ms Megginson said.
“Now as interest rates skyrocket, many have been pushed to their financial limit — with further rises on the way.”
Younger property buyers were the hardest hit — with a quarter of generation Z buyers (25 per cent) admitting they had borrowed too much.
Queenslanders (26 per cent) were the most likely to have regrets about how much they had borrowed, followed by borrowers from NSW (25 per cent).
Men were more likely to say they were overcommitted — with 23 per cent admitting they had borrowed too much on their home loan, compared to 19 per cent of women.
