Two million Australians struggling to keep a roof over their head

• • • • Mortgage deferral could add an extra $11,000 to your loan
      • Young Australians are struggling the most
      • How to keep up with your mortgage

14 May 2020, Sydney, Australia – Millions of Australians are struggling to pay their mortgage and rental payments, new research by Finder Australia's most visited comparison site reveals.

A recent Finder survey of 1,023 respondents found that 15% – equivalent to 2.9 million Australians – are asking for a rent reduction or pause in their mortgage repayments.

This includes 1.2 million homeowners who have already contacted or plan on contacting their lender regarding a pause in their mortgage repayments.

A further 1.7 million Aussies intend on negotiating cheaper rent with their landlord.

Kate Browne, personal finance expert at Finder, is concerned by the number of Australians only just scraping by.

"Almost everyone has felt the financial fallout in some way but there are options to help you get back on your feet.

"Whether you own your own home or are renting it's time to re-evaluate your expenses and see where you can cut down."

"If you have a home loan, pause in your mortgage payments should be your last resort."

While you may be able to hit pause on your mortgage you will have to repay the money later plus more in interest. A mortgage holiday could leave you paying thousands more in interest and possibly extend the length of your loan.

Finder research found that for a $500,000 loan at an average variable rate of 3.90%, if you paused repayments for 6 months (after 10 years), you would pay an extra $11,127 over the remaining 20 years of the loan.

On a $400,000 loan size with an average variable rate of 3.90%, you'd pay an extra $8,902 over the remaining 20 years.

"We would recommend looking into getting a better rate on your home loan first if you are struggling to make your repayments. While a mortgage deferral or holiday sounds appealing in the short term you need to seriously consider whether you'll be able to afford this 'holiday' in the long run."

"Refinancing your mortgage could save you enough to avoid having to pause your payments. COVID-19 has hit the economy hard but the silver lining is that home loan interest rates have never been lower."

"If your interest rate doesn't have a two in front of it you need to start shopping around. There are hundreds of dollars to be saved simply by switching."

"For more information on what lenders are doing to help their customers check out Finder's coronavirus mortgage support page," Browne said.

Unsurprisingly, younger Australians are feeling the heat the most with one in four (26%) looking for ways to cut housing costs.

In comparison, only 10% of Gen X, and 1% of Baby Boomers are looking to their real estate agent and lender for help.

"During a time of economic uncertainty you should always look for ways to cut down your expenses and make sure that they're getting the best deal on everything from their groceries, to their home loan interest rate."

How to keep up with your mortgage

Refinance with your lender or switch for a better deal: The cash rate has fallen to 0.25% meaning interest rates are at an all time low. Now is the time to check whether there's a better deal out there.

Cut down unnecessary spend: It's the small steps that really add up. Finder has put together a list of 31 ways to save money in your everyday life

Put your commuting savings to work: The average Aussie working from home is saving more than $100 a month in commuting costs alone, from public transport and taxis, to tolls, petrol, parking if you are driving. Take advantage of this saving and put it toward your home loan.

Ask for help: If you are in financial stress and you don't know where else to turn, consider reaching out to a financial counselor for help.