Westpac says more Aussies are missing mortgage repayments: here’s how to avoid their mistakes

By Katherine O'Chee · · 6 min read
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Westpac has found more Aussies are now struggling to meet their home loan repayments, despite positives in the air like lower interest rates and a recovering housing market. 

While overall bad debt levels continue to be very low, the proportion of mortgages that are more than three months overdue has risen since the March quarter, from 0.82% to 0.9% this quarter. The number of residential properties Westpac repossessed has also increased from 482 to 550. 

This follows reports from two other big banks, ANZ and NAB, which similarly noted mortgage arrears or missed repayments during the June quarter have been creeping up. 

Westpac said higher rates of arrears and home repossessions reflect a weaker property market.

RELATED ARTICLE: Mortgage stress puts financial stress on Aussie households: ME Bank

According to Mozo’s property expert Steve Jovcevski, a tougher than usual job market and slowing income growth are possible culprits behind more missed repayments.

“While costs of living are increasing, people’s wages are not, and that’s putting a strain on Aussies trying to meet their home loan repayments,” Jovcevski said. 

So for those digging deep into their pockets every month to pay off their loan, Jovcevski recommended shopping around for other offers in the market. By snagging a new, low rate home loan, borrowers can reduce their monthly repayments considerably.

“A lot of people just stick with the big banks and don’t look around,” he said. “Mortgage repayments are going down, but the problem is, cheaper home loan rates seem to be reserved for new borrowers and current customers are missing out on better deals because of that.” 

Top tips for refinancing to a better home loan deal 

Refinancing your mortgage could see hundreds of dollars trimmed off your monthly repayments. 

Even a 1% interest rate difference matters - if you took out a $500,000 loan over 30 years at 3% instead of 4%, you could expect to repay $279 less per month and $100,461 less in total interest over the life of the loan.* 

Not convinced? Punch in the numbers into our Switch and Save calculator to see just how much you could save by refinancing your mortgage. 

Read on for three quick tips to get you started today: 

1. Keep up your repayments for six months

Make sure you haven’t missed any repayments for at least six months before refinancing, as otherwise you can wave goodbye to any hope of getting that tick of approval next to your new home loan. 

Skipped on a repayment? Not the end of the world! Jovcevski recommended “sticking where you are, getting yourself six months clear of repayment history and then applying.” 

2. Pick the right time 

Relationships and home loans have one thing in common: you’ve got to get the timing right! 

Let’s say you’re working full-time at a company, but you’re going on maternity leave or moving onto freelancing soon. Consider refinancing before you leave your current role because, as Jovcevski puts it, “the more income and the more stability you have, the more comfortable the lender will be.” 

3. Talk to the lender before applying

Think you’ve found the perfect new home loan? You might be tempted to put in your application straight away. But Jovcevski recommended speaking to the lender first and getting an idea of whether you can service the loan.  

“That’s because any official inquiry you make with a lender, whether you are or aren’t approved, is a black mark on your credit history,” he said. “Making too many inquiries to too many lenders will actually reduce your credit score, which can in turn affect you getting a home loan or refinancing.” 

Ready to look for a killer new home loan? Read our article on how to refinance to a better home loan deal, or head over to our refinance home loan comparison table to find a deal that suits you.

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Last updated 30 October 2024 Important disclosures and comparison rate warning*

Refinance home loan comparisons on Mozo

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  • Fixed Home Loan

    • Owner Occupier
    • Principal and Interest
    Interest rate
    5.54 % p.a.
    Fixed 2 years
    Comparison rate
    5.93 % p.a.
    Initial monthly repayment
    $2,852
    Go to site

    Competitive fixed rate on up to a 30 year loan term. No application fees to pay. Additional repayments up to $20,000 per year without penalty. Free online redraw. Optional 100% offset feature ($10/month) 10% minimum deposit. Fees & charges apply, Australian Credit Licence 237879 is held by Bendigo and Adelaide Bank Limited, the credit provider.

  • Unloan Variable

    • Owner Occupier
    • LVR <80%
    Interest rate
    5.99 % p.a.
    Variable
    Comparison rate
    5.90 % p.a.
    Initial monthly repayment
    $2,995
    Go to site

    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.

  • Fixed Express Home Loan

    • Owner Occupier
    • Principal & Interest
    Interest rate
    5.54 % p.a.
    Fixed 2 years
    Comparison rate
    6.11 % p.a.
    Initial monthly repayment
    $2,852
    Go to site

    Lock in a low 2 year fixed rate with the Mozo award winning Home Lender of the Year. Available for live-in borrowers with just a 10% deposit required. Free extra repayments (up to 20% in fixed period), free redraw and partial offset available. $10 monthly service fee. Aussie support centre. Fast approvals. Up to 6 free offset accounts (T&Cs apply).

  • Fixed Home Loan

    • Owner Occupier
    • Principal and Interest
    Interest rate
    5.54 % p.a.
    Fixed 2 years
    Comparison rate
    5.93 % p.a.
    Initial monthly repayment
    $2,852
    Go to site

    Competitive fixed rate on up to a 30 year loan term. No application fees to pay. Additional repayments up to $20,000 per year without penalty. Free online redraw. Optional 100% offset feature ($10/month) 10% minimum deposit. Fees & charges apply, Australian Credit Licence 237879 is held by Bendigo and Adelaide Bank Limited, the credit provider.

  • Fixed Express Home Loan

    • Owner Occupier
    • Principal & Interest
    Interest rate
    5.54 % p.a.
    Fixed 2 years
    Comparison rate
    6.11 % p.a.
    Initial monthly repayment
    $2,852
    Go to site

    Lock in a low 2 year fixed rate with the Mozo award winning Home Lender of the Year. Available for live-in borrowers with just a 10% deposit required. Free extra repayments (up to 20% in fixed period), free redraw and partial offset available. $10 monthly service fee. Aussie support centre. Fast approvals. Up to 6 free offset accounts (T&Cs apply).

  • Fixed Rate Home Loan

    • Owner Occupier
    • Principal & Interest
    • LVR <60%
    Interest rate
    5.59 % p.a.
    Fixed 5 years
    Comparison rate
    6.27 % p.a.
    Initial monthly repayment
    $2,867

    Get repayment certainty with HSBC’s low 2 Year Fixed Rate Home Loan. Make up to $10,000 of extra repayments a year. The option to split your home loan between fixed and variable. Plus, score $3,288 cashback when you refinance an existing home loan of $250,000. Must apply by 28 February 2023 and settle by 30 April 2023.

  • Fixed Rate

    • Owner Occupier
    • Principal & Interest
    • <80% LVR
    Interest rate
    5.74 % p.a.
    Fixed 3 years
    Comparison rate
    6.81 % p.a.
    Initial monthly repayment
    $2,915

    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.

  • Variable Home Loan

    • Owner Occupier
    • Principal and Interest
    Interest rate
    5.98 % p.a.
    Variable
    Comparison rate
    6.02 % p.a.
    Initial monthly repayment
    $2,991
    Go to site

    Competitive variable rate on up to a 30 year loan term. No application fees to pay. Unlimited additional repayments. Free online redraw. Optional 100% offset feature ($10/month) 10% minimum deposit. Fees & charges apply, Australian Credit Licence 237879 is held by Bendigo and Adelaide Bank Limited, the credit provider.

  • Unloan Variable

    • Owner Occupier
    • LVR <80%
    Interest rate
    5.99 % p.a.
    Variable
    Comparison rate
    5.90 % p.a.
    Initial monthly repayment
    $2,995
    Go to site

    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.

  • Discounted Home Value Loan

    • Owner Occupier
    • Principal & Interest
    • LVR <60%
    Interest rate
    5.99 % p.a.
    Variable
    Comparison rate
    5.99 % p.a.
    Initial monthly repayment
    $2,995

    Enjoy competitive rates for owner occupiers. Enjoy unlimited free extra repayments. Flexibility to redraw additional payments for free. No ongoing monthly service fee. Receive $3,288 cashback when you refinance an existing home loan. Minimum loan amount of $250,000, settle within 120 days from applying.

  • Express Home Loan

    • Owner Occupier
    • Principal & Interest
    • LVR <90%
    Interest rate
    6.09 % p.a.
    Variable
    Comparison rate
    6.22 % p.a.
    Initial monthly repayment
    $3,027
    Go to site

    Get online approval from the award-winning Bendigo Bank Express Home Loan. Multiple offset accounts and redraw available. 100% offset on variable rate loans and partial offset on fixed rate. Flexible repayment options. New home loans only.

  • Mortgage Simplifier

    • LVR<80%
    • Owner Occupier
    • Principal & Interest
    Interest rate
    6.14 % p.a.
    Variable
    Comparison rate
    6.17 % p.a.
    Initial monthly repayment
    $3,043

    Get a competitive variable rate with ING’s Mortgage Simplifier. Free extra repayments, no monthly or annual fees. Freedom to make free extra repayments or redraws.

  • Elevate

    • Owner Occupier
    • Principal & Interest
    • <80% LVR
    Interest rate
    6.18 % p.a.
    Variable
    Comparison rate
    6.18 % p.a.
    Initial monthly repayment
    $3,056

    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.

* 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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