If your repayments have climbed and the budget no longer works, you are in a very large group. Roy Morgan assessed around 1.61 million Australian owner-occupier mortgage holders, close to 30 percent, as at risk of mortgage stress in the three months to June 2026.
That number matters for one reason only. This is a market condition, not a personal failure, and the systems that exist to help were built for exactly this.
Here are the options in the order they are actually worth trying. Some of them do not involve us, and that is deliberate.
Start here: contact your lender before you miss a payment
This is the single highest value thing on this page and it costs nothing.
Every Australian credit provider is legally required to consider a hardship notice. You can give one verbally or in writing, and the lender has to respond within 21 days. You do not need a reason they approve of. Reduced income, illness, separation, a repayment jump you did not plan for, all of it counts.
What they can offer varies, but commonly includes:
- A short period of reduced repayments
- A pause on repayments, usually a few months
- Extending your loan term to lower the monthly amount
- Moving temporarily to interest only
- Capitalising arrears back into the loan
The reason to do this before you miss a payment rather than after is that your options shrink considerably once you are in arrears. A hardship arrangement is recorded differently from a default. Repayment history information can carry a financial hardship indicator for up to 12 months, which is far less damaging than a listed default that sits on your file for five years.
People avoid this call because they expect judgement. Hardship teams handle thousands of these. It is a process, not a confession.
Use the free financial counselling service
The National Debt Helpline, 1800 007 007, is free, independent and has no commercial interest in what you decide.
Financial counsellors are not salespeople. They do not earn commission, they cannot sell you a loan, and they can negotiate with your lender on your behalf. For anyone whose problem is broader than the mortgage, so credit cards, buy now pay later, car finance and personal loans stacked together, this is the right first call.
We are a finance brokerage. We are telling you to ring them first because for a meaningful share of people reading this, a new loan is not the answer, and you deserve to hear that from someone rather than be sold something.
Then work out which problem you actually have
Mortgage stress looks the same from the outside but has three different causes, and they need different fixes.
Your rate went up but your income and equity are fine. This is the most fixable. You are probably paying a revert rate or a lender who has not passed on competitive pricing. Refinancing or a retention call is likely to work.
Your income fell. Reduced hours, a job change, parental leave, a business downturn. Refinancing is harder here because serviceability is assessed on current income. Hardship assistance is usually the better first move, with refinancing once income stabilises.
Your debts have stacked up. The mortgage is manageable in isolation, but credit cards at 20 percent and a car loan on top have made the total unaffordable. This is where debt consolidation genuinely helps, but only under specific conditions covered below.
Being honest with yourself about which one you have will save you months.
What a broker can and cannot do
Worth being direct, because the industry is not always.
Can help if: you still meet serviceability somewhere, your LVR is reasonable, and your credit file is intact. Different lenders assess the same borrower very differently. Serviceability buffers vary from around 1.5 percent at the most flexible lender on our modelled panel to 3 percent at most of the majors, and that gap alone decides plenty of applications.
Cannot help if: your income no longer services the debt at any lender's assessment rate, you are already in arrears, or your LVR has risen above what lenders will refinance. In those cases a broker application produces a decline and a credit enquiry, which leaves you slightly worse off than before.
An honest broker will tell you which group you are in before taking an application. If nobody has said that to you, ask directly.
Debt consolidation, and the condition that makes or breaks it
Rolling high interest consumer debt into your mortgage lowers your total monthly outgoings, sometimes substantially. Credit cards at 20 percent moving to a home loan rate is a real saving.
The trap is the term. A $30,000 credit card balance moved into a 28 year mortgage at a lower rate costs less each month and more overall, because you are paying it off across three decades instead of three years.
The condition that makes it work: keep your total repayment at or near what you were paying before, and direct the difference at the consolidated portion. If you consolidate and then spend the monthly saving, you have converted short term debt into long term debt and gained nothing.
If you cannot commit to that, the consolidation will feel better for a year and cost you more for twenty.
Things worth doing this week
Ask your current lender for a better rate. Ring the retention team, not the general line, and quote a real competing number. It costs one call and lenders discount rather than lose loans.
Check whether you are on a revert rate. If a fixed term ended and you did nothing, you almost certainly are, and it is rarely their best offer.
Look at your credit card limits. Lenders assess the full limit as debt whether you use it or not. A $20,000 card you never touch is reducing your borrowing capacity and may be blocking a refinance that would help.
Do not apply to multiple lenders. Every application leaves an enquiry. A cluster of recent enquiries reads as distress to every lender who looks afterwards, and it is one of the few parts of this you fully control.
If things are further along than that
If you have already missed payments or received a default notice, the order changes. Ring the National Debt Helpline on 1800 007 007 first. Financial counsellors deal with lenders and debt collectors daily and can often negotiate outcomes that are not offered to individuals.
You may also be able to take a dispute to the Australian Financial Complaints Authority, which is free, if your lender has not responded to a hardship notice properly.
Selling is a legitimate option too, and choosing to sell on your own timeline is materially better than a forced sale. Nobody enjoys hearing it, but people who consider it early end up with more of their equity than people who consider it late.
Where we fit
If your situation is the first type, where the rate is the problem rather than the income, we can compare your position against 130+ lenders and tell you whether a better outcome exists before you apply anywhere. Your Kreddi Score shows where you stand across credit health, debt efficiency, asset strength, cash flow and borrowing power, with no impact on your credit file.
If it turns out nothing better is available, we will say so. That is worth knowing too, and it costs you nothing to find out.
Frequently Asked Questions
What should I do first if I cannot afford my mortgage repayments? Contact your lender's hardship team before you miss a payment. Every Australian lender is legally required to consider a hardship notice, and asking for help early gives you far more options than asking after you have defaulted. It does not appear on your credit file as a default.
Does asking for hardship assistance hurt my credit score? A hardship arrangement itself is recorded differently from a missed payment. Repayment history information can show a financial hardship indicator for up to 12 months, which is far less damaging than an actual default or a listed arrears record. Missing payments without telling anyone is worse.
Can refinancing fix mortgage stress? Sometimes, and only if you still meet a lender's serviceability test. If your income has fallen or your LVR is above 80 percent, refinancing may not be available. That is why hardship assistance and a conversation with your current lender come first, before any application.
Is there free help for mortgage stress in Australia? Yes. The National Debt Helpline on 1800 007 007 provides free, independent financial counselling with no sales interest in your outcome. Financial counsellors can negotiate with lenders on your behalf. It is genuinely free and worth using before you make any large decision.
What is mortgage stress? The common measure is spending more than 30 percent of pre-tax household income on home loan repayments, though Roy Morgan assesses it against actual income and spending. Around 30 percent of Australian owner-occupier mortgage holders were assessed at risk in the three months to June 2026.
Work Out Which Options Are Actually Open to You
If you are behind or heading that way, the first two calls are your lender's hardship team and the National Debt Helpline on 1800 007 007. Both are free, and neither costs you anything on your credit file.
When you are ready to look at whether a different loan structure would help, your Kreddi Score shows which lenders would consider you today, with no application and no credit enquiry. If the honest answer is that refinancing will not fix this, you will get that answer too.
This is general information, not personal or financial advice, and it does not take your circumstances into account. If you are experiencing financial difficulty, free and independent help is available from the National Debt Helpline on 1800 007 007. NIK Finance Pty Ltd is a Credit Representative (567387) of Finsure Finance & Insurance Pty Ltd, Australian Credit Licence 384704.
Mortgage stress figures: Roy Morgan, owner-occupier mortgage holders assessed at risk, three months to June 2026.