Mortgage stress happens when a large portion of your income goes toward home loan repayments, leaving little room for everyday expenses, savings, or emergencies. In Australia, households are often considered under mortgage stress when more than 30% of their income is spent on home loan repayments.

With interest rates and living costs on the rise, more Australians are finding themselves stretched thin. Mortgage stress can make it difficult to keep up with bills or maintain financial stability, but there are practical solutions — such as refinancing to a lower rate, restructuring your loan, or adjusting your repayment plan.

Our Mortgage Stress Calculator helps you understand your position before things get too tight. By identifying pressure points early, you can take steps to reduce repayments, improve your cash flow, and regain financial confidence.

LMI stands for Lender’s Mortgage Insurance. This protects the bank in case you default on your home loan. This is an additional charge, typically if your deposit is less than 20% of the purchase price. If you want to buy a property for $500,000 and have $50,000 (10%) saved for a deposit, the bank may charge you LMI. LMI is a once-off payment, and can often be added to your loan amount.

LVR stands for Loan to Value Ratio. The amount of money that a bank will lend you based on how much the property is worth. For example, an 80% LVR means the bank is willing to lend up to 80% of what the property is worth. If you’re buying a property for $500,000, an 80% LVR loan is $400,000. In this example, you would need to have $100,000 (20% of $500,000) saved up for a deposit.

Absolutely not. When applying for a home loan a mortgage broker can often get you better rates than what you could by going directly to your bank. First, they get some info, do lots more research and then they’ll show you the lowest rates from a range of lenders. Then, they’ll negotiate with the bank to ensure you get the best rate possible. This service costs you nothing and you might even end up paying a lot less than nothing – if you get a cashback or or secure a lower rate, or both!?

You might incur break costs  if you repay a fixed rate interest loan before the end of the fixed interest period or if you make extra repayments that exceed the maximum allowed on your loan. If you do want to repay your loan in full, you can ask your lender for a quote on current break costs to see how much extra you might be charged.

Lenders often use rebates or cash back as an incentive to refinance with them. Cash back gives you a refund once you’ve taken out your loan, while a rebate is a reduction in the balance of the loan. It’s wise to compare all other interest charges, comparison rates and fees to make sure it’s a good deal.

A comparison rate factors in all costs associated with a loan, including the interest rate, fees and charges. It helps you understand the true cost of a loan and more easily compare with loans from different lenders, so you can estimate how much you might pay over the life of the loan. It is represented by a single percentage rate which factors-in the interest rate, fees and charges relating to the loan. (Government charges or early pay out fees are excluded).