Australian homeowners are starting to feel more optimistic about their financial futures, with new data showing a marked improvement in mortgage stress levels across the country.
A national survey by the Mortgage & Finance Association of Australia (MFAA) has revealed that more than 80% of mortgage holders now feel positive or neutral about their financial outlook – a shift from the doom and gloom of recent years.
The February 2025 Member Sentiment Survey, which polled 320 mortgage brokers nationwide, found that brokers reporting high levels of client stress have halved over the past year. Only 24% of brokers now say that more than one in 10 of their clients are stressed about meeting mortgage repayments, down from 49% twelve months ago.
MFAA CEO Anja Pannek said the results showed a “wait and see” attitude among homeowners, but with a decidedly more positive bent than previous surveys.
“No doubt clients have worked with their brokers to minimise their interest rates, and as unemployment remains low, mortgagees are adjusting and feeling more positive about their ability to make their payments,” Pannek said.
The survey also revealed good news for homeowners looking to refinance, with far fewer borrowers struggling to meet serviceability requirements. Only 42% of brokers reported clients finding it difficult to refinance, compared to a whopping 83% a year ago.
This improved refinancing environment comes despite the Australian Prudential Regulation Authority’s requirement that borrowers demonstrate they can meet repayments at 3% above their loan rate – the so-called “serviceability buffer”.
According to Pannek, several factors have contributed to the brightening outlook, including February’s cash rate cut to 4.10% by the Reserve Bank, strong property equity levels, and Australia’s persistently low unemployment rate.
“They have been buoyed by an improved interest rate environment with the Reserve Bank cutting the cash rate to 4.10% in February, with the possibility of further interest rate cuts to come as our global geopolitical environment remains dynamic,” she said.
MFAA noted that the survey results align with recent Australian Bureau of Statistics data showing external refinances by owner-occupiers rose 12% in the December 2024 quarter compared to the previous three months.
“Brokers played a critical role when borrowers were doing it tough in an economy affected by high interest rates – they have educated their clients about being financially fit, helped them negotiate a better rate with existing lenders, consolidated debt to improve cashflow, or refinanced to a better product,” Pannek said.
Is the housing market starting to see improvements? Share your insights below.
