New research released today by AMP Bank has confirmed that while an increasing number of Australian mortgage holders are concerned about rising interest rates, the majority are taking positive steps now to cushion the financial impact. 

The key findings of the research are:

• Seven in 10 (69 per cent) homeowners will be worried about meeting their mortgage repayments if interest rates continue to rise, an increase of 5 percentage points compared to October 2022
• The majority of people surveyed, 83 per cent, have built a savings buffer and have access to savings to cover an extra month’s mortgage repayment
• More than two thirds (71 per cent) have made changes to their household budgets, most commonly this included reducing spend on groceries, entertainment, clothing, holidays, and gifts to account for higher interest rates (up from 58 per cent in October 2022)
• People with children and those under 44 noted the highest impacts, with 79 per cent of these groups having adjusted their household budgets, compared to the national average of 71 per cent
• Aside from reducing spending, 54 per cent have found other ways to supplement their cashflow and income to increase their savings buffers with 74 per cent of these people saying actions they have taken have helped to improve their sense of financial wellbeing.

AMP Bank’s research found that only 45 per cent of people were confident that their current rate was competitive, and that half (49 per cent) were considering refinancing in the next year.

Two-thirds of respondents (62 per cent) who have a fixed rate component to their mortgage also say they are taking steps now to prepare for the end of their fixed rate term. The vast majority (96 per cent) expect interest rates to continue to rise. 

Sean O’Malley, AMP Bank Group Executive said:

“In a period of higher costs of living, it’s no surprise that mortgage holders are finding more creative ways to improve their household budgets, including finding a way to create a savings buffer.

“While rising interest rates and higher costs of living are challenging, it’s a positive sign that Australians are taking action to improve their financial wellbeing. Steps like reviewing cashflow, setting a budget and regularly shopping around for a more competitive interest rate offer are practical ways to help reduce financial stress.

“Many Australian homeowners will find themselves in a higher interest rate environment as they roll-off fixed home loans in the months ahead.

“If not already, it’s a good idea to talk to your bank or broker to understand your options and get resources and help tailored to your circumstances.”

Tips for managing financial wellbeing

1. Find your bearings: Start by clarifying exactly where you are financially, including both your spending and income. Then take advantage of one of the many budget/tracking apps that provide a clear view of your spending patterns, for example AMP’s budget planner calculator and expense planner calculator, and ASIC’s MoneySmart tools.
2. Check your home loan is right for you: There are a range of home loan products on the market which come with different features based on customers’ preferences, needs and eligibility. Consider what loan options best suit you and your individual circumstances.
3. Get assistance when you need it: There’s plenty of research showing that people who draw on expert advice are less financially stressed and make better decisions. Use reputable sources such as your financial institution, government resources, and trusted third-party comparison websites.
4. Don’t hesitate to contact your bank or talk to your broker for specialised help. In cases where it’s needed, most banks will have dedicated financial wellbeing support available for customers.

About the research

AMP Bank commissioned Dynata to conduct an online survey of the Australian population 18 years and over who currently hold a mortgage. Data from more than 1,000 respondents was collected in February 2023. The survey was nationally representative and conducted to understand the impact of rising interest rates, and the perceptions of Australian homeowners towards refinancing.

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