Is a recession on the cards? Here’s how homeowners prepare

By Cameron Thomson · · 2 min read
Fact Checked
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The risk of a recession could be as high as 80% over 2023 and potentially 2024, according to internal Reserve Bank of Australia (RBA) research released under a freedom of information request. 

The modelling, made in September 2022, found that the risk of a recession by September 2024 could be as high as 80%. The research found that if a recession were to occur, it would be over the course of the next four quarters with a 40% to 60% chance of a recession in September of 2023.

Whether the RBA can get inflation down to its 2-3% target without an economic contraction and/or mass unemployment remains to be seen. However, for homeowners, this could mean further interest rate hikes and more expensive home loans. 

So, the question is, what can homeowners do to protect themselves from further rate hikes and potential recession risks?

Recession-proofing measures home owners you can take

While no one can predict the exact timing or severity of a recession, if it happens at all, the grim predictions by the RBA research means that being prepared is important. 

  • Build an Emergency Fund: Establishing an emergency fund is crucial during uncertain times. Aim to save at least three to six months of living expenses. This fund can be a safety net in case of unexpected job loss or financial difficulties.
  • Reduce Debt: High levels of debt can be burdensome during a recession, especially on top of a mortgage. Prioritise paying off high-interest debt and consider debt consolidation so that, instead of paying multiple loans, you only have one loan to deal with. 
  • Refinance your home loan: Feel like your home loan isn’t as great as you want it to be? Refinancing your home loan is a great way to get a better deal for your mortgage. Maybe you feel like you can get a better rate, or are you looking for an account with an offset with it? Refinancing can let you get a loan with a provider that helps you through the tough times. 
  • Build up your offset account: If your mortgage has an offset account, it might be a good idea to start making regular deposits. Not only will it reduce the interest on your payments—which is even more important due to interest rate hikes—but you’ll also have a place to keep emergency funds.

Whether there is a recession or not, making sure you’ve got the home loan that’s right for you is important. At Mozo, we have comparisons on a bunch of refinancing home loan providers, so that you can get the mortgage that works well for you.

Home loan comparisons on Mozo - last updated 20 May 2024

Search promoted home loans below or do a full Mozo database search. Advertiser disclosure
  • Featured Product
    Mozo Expert Choice Badge
    Unloan Variable

    Owner Occupier, LVR <80%

    interest rate
    comparison rate
    Initial monthly repayment
    5.99% p.a. variable
    5.90% p.a.

    Built by CommBank, the Unloan is the first home loan with an increasing discount (conditions apply) for borrowers. No application or banking fees. No monthly account keeping or early exit fees. Apply online in minutes.

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  • Basic Home Loan

    Owner Occupier, LVR<60%, Principal & Interest

    interest rate
    comparison rate
    Initial monthly repayment
    6.14% p.a. variable
    6.16% p.a.

    Enjoy a low rate home loan with $0 application fee and $0 ongoing fees. Flexibility to split your loan and set different repayment types. Fee free redraw from your loan using online banking. Flexible ways to repay. 40% Deposit required.

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  • Featured Product
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    Unloan Variable

    Investment, LVR <80%

    interest rate
    comparison rate
    Initial monthly repayment
    6.29% p.a. variable
    6.20% p.a.

    Built by CommBank, the Unloan is the first home loan with an increasing discount (conditions apply) for investors. No application or banking fees. No monthly account keeping or early exit fees. Apply online in minutes.

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  • Fixed Rate

    Owner Occupier, Principal & Interest, <80% LVR

    interest rate
    comparison rate
    Initial monthly repayment
    6.54% p.a.
    fixed 2 years
    7.10% p.a.

    Enjoy up to $3000 cashback for eligible first home buyers and $2000 cashback for refinancers on eligible home loans with the ANZ Fixed Rate Home Loan. Get the security of repayment certainty with a competitive locked in rate. No ongoing fees to pay. Offset account on 1-year fixed loans ($10/month fee applies). Interest-only payments allowed.

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  • Elevate

    Owner Occupier, Principal & Interest, <80% LVR

    interest rate
    comparison rate
    Initial monthly repayment
    6.09% p.a. variable
    6.20% p.a.

    Get competitive rates on loan terms of 5 to 30 years with the Aussie Elevate Home Loan. Structure your loan with up to five splits. Make additional repayments (T&Cs apply). Offset accounts available. Unlimited redraw using your online banking account. Choose from weekly, fortnightly or monthly payments For loan amounts from $10,000 to $5 million.

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* WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. The comparison rate displayed is for a secured loan with monthly principal and interest repayments for $150,000 over 25 years.

** Initial monthly repayment figures are estimates only, based on the advertised rate. You can change the loan amount and term in the input boxes at the top of this table. Rates, fees and charges and therefore the total cost of the loan may vary depending on your loan amount, loan term, and credit history. Actual repayments will depend on your individual circumstances and interest rate changes.

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