Recent research has exposed the alarming financial challenges confronting a significant portion of the Australian population. As interest rates continue their ascent, approximately 12% of Australians are grappling to keep up with their home loan repayments, nudging them perilously close to a financial precipice. These revelations come at a critical juncture, coinciding with the Reserve Bank of Australia's (RBA) decision to implement another interest rate hike on Melbourne Cup day.

Interestingly, a prior survey conducted by Compare the Market in March disclosed that only 7% of homeowners had admitted to missing a mortgage repayment in the past year. Nevertheless, the latest data paints a far bleaker picture, illustrating a marked deterioration in the financial well-being of Australian homeowners in just half a year.

One conspicuous trend is the disproportionate burden on millennials, closely followed by the Gen X generation. Geographically, homeowners in New South Wales are encountering the most challenges in meeting their home loan repayments, with Victoria, Queensland, and South Australia following suit.

Head of Finance and Lending Shane Moloney said "The surging number of Australians struggling with mortgage repayments is an ominous signal for our financial landscape. This should undoubtedly weigh heavily on the minds of the Reserve Bank as their decisions have an impact on everyday people’s household budgets.”

The survey conducted by Compare the Market indicates that many Australians may be accumulating more debt as part of their spending habits. The research unveiled that 69% of Australians carry some form of debt, encompassing credit card or mortgage debt, personal or informal loans, and buy-now-pay-later obligations.

Specifically, the data divulged that 39% of Australians have credit card debt, 17% owe money to buy-now-pay-later providers, 10% are repaying personal loans or car finance, and 8% are indebted to family members or friends. This growing debt load adds to the financial challenges faced by a substantial portion of the population.

The financial hardships confronting Australians extend beyond home loan repayments and consumer debt. The survey also uncovered that 10% of respondents owe money to utility retailers, underscoring the mounting costs of essential services.

Even as some Australians managed to save during the pandemic, the increasing cost of living has eroded their savings. The survey disclosed that 29% of Australians lack a savings buffer, raising concerns about their ability to navigate a progressively expensive living environment. Gen X, in particular, appears to be grappling with this issue, with 38% reporting having no savings in the bank.

In contrast, just 23% of Baby Boomers, 27% of Millennials, and 29% of Gen Z indicated having no savings. These findings underscore the financial challenges affecting a significant portion of the Australian population and emphasise the urgency of addressing the economic strains exacerbated by rising interest rates and the cost of living.