New data exposes what Aussies are sacrificing to get a home loan

Nearly four million Aussies are slashing their spending to boost their borrowing power, but more than one in three believe they will never be able to afford a home.

A Finder survey of 1034 respondents revealed 18 per cent – equivalent to 3.9 million people – have reduced their personal debt and slashed their spending to enable them to refinance or be approved for a home loan in the last five years.

Eating out is one expense being cut. Picture: iStock.

Finder personal finance expert Sarah Megginson said Aussies were going above and beyond to boost their chance of approval.

“Lenders are scrutinising household spending more than ever, which means everyday purchases – from dining out to digital subscriptions – can be the difference between a loan approval and a rejection,” Megginson said.

“Consumers aren’t just cutting back on luxuries; many are reworking their entire financial lives to prove to lenders they’re a safe bet.

“The fact that so many are cutting back just to refinance reveals how tight the credit environment is.

“It’s no longer enough to have equity, you need spotless spending habits too.”

Personal finance expert at Finder, Sarah Megginson. Picture: Supplied

Finder’s data shows more than one in three (35%) Australians don’t think they’ll ever be able to afford their own home.

Megginson said some are putting major life plans on hold, from starting a family to upgrading a car, in a bid to keep or qualify for a mortgage.

“It’s a stark reminder that home ownership now dictates how, and when, Australians live their lives,” she said.

Aussies are also delaying starting a family just to afford a home iStock.

It comes as another survey by Compare the Market revealed that Aussies were grappling with cost of living pressures, and many were being forced to turn to credit cards to get by.

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It is ironic that banks issue credit cards and then use them against you when applying for a home loan. istock.

Credit cards that, ironically, are issued by the very banks that Aussies turn to for a home loan.

“When the bills and everyday life expenses continue to pile up, Australians are unfortunately resorting to credit cards, Buy Now, Pay Later, and personal loans in order to fulfil their lifestyles,” Compare the Market’s economic director David Koch said.

“Whether it’s shopping for Christmas presents or trying to pay high medical bills, money is tight for many.

“People can’t afford to wait and save up; they need the money now.

“Only 7 per cent of Australians surveyed think the cost-of-living has improved in the past year, as part of Compare the Market’s Household Budget Barometer report.

“But building up money debt is an unhealthy habit.

“It’s important to be honest with your finances and not overreach more than necessary.

“This is why financial education is so important and the federal government should make it compulsory in the school curriculum.”

David Koch. Picture: NewsWire / Monique Harmer

The report half of the Aussies surveyed (50%) currently have a credit card debt, a 9 per cent increase compared to last year, with Generation X the most likely cohort to carry credit card debt (31%).

Meanwhile, more than a quarter of Australians (26%) had Buy Now, Pay Later debt – representing an 8 per cent increase versus 2024.

Millennials were the most likely to use Buy Now, Pay Later schemes (40%).Car loans (13%), personal loans (10%) and education debt (11%) also saw minor increases this year.

For those buying a home, Megginson urged Aussies to make sure they were getting the best deal.

“Once you’re ready to buy or refinance, make sure you don’t pay too much for the loan. Even half a per cent can mean thousands of dollars saved every year,” she said.

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