Data shows mortgage defaults are at low levels, but that's statistic alone doesn't give the full story. Australians feeling financial stress are often behind on other payments such as bills. And many people are choosing to sell their homes to avoid getting into trouble with the bank.
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00:00After the stress of seeing his mortgage repayments shoot up, Andy Barrows decided to sell his
00:07house and rent instead.
00:09It's a massive relief, literally from four hours sleep a night wringing my hands and
00:14worrying about the future and about the present to waking up refreshed.
00:19Just as he stopped working full time, the Reserve Bank started lifting interest rates.
00:25We were paying 30% more probably for our mortgage.
00:30Andy is one of many Australians who decided to sell their homes in the past three years.
00:36The number of properties changing hands within this period has surged to its highest level
00:41in at least a decade.
00:43And the number of borrowers who are at least 30 or 90 days behind on their repayments is
00:48ticking up.
00:50We have about three in a thousand customers in hardship.
00:53That's not quite reflecting the true amount of financial stress in the community.
00:57That's because people tend to struggle with other bills first.
01:01People are falling behind on council rates, utility bills like their electricity, gas
01:05and water bills, telephone bills, other debts like credit cards and personal loans.
01:12The comparison website Finder has surveyed more than a thousand people and found that
01:17one in five have switched to making interest only repayments.
01:21It makes your repayments lower in the short term, but in the long term it does increase
01:25your interest costs quite a lot.
01:27Most borrowers have already transitioned to much higher variable rates.
01:31Many of them have been able to escape the worst of the mortgage cliff by selling their
01:35homes before they fall too far behind on their repayments.
01:39While that's keeping mortgage defaults low for now, many borrowers will face intense
01:44pressure to sell, just like Andy did.