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For Emily Knights, home ownership became a source of intense financial pressure after her relationship ended. The 34-year-old nurse became responsible for the entire mortgage on a two-bedroom home in Geelong, Victoria—a property that still needed renovations and did not have a working oven.
Knights says about half of her wage goes towards the house. After several Reserve Bank interest rate rises, she describes barely scraping by, obsessing over her budget and experiencing anxiety and rumination.
Her experience reflects a broader pattern identified in new Australian research: mortgage holders facing both high repayments and active financial hardship experienced a particularly large decline in mental health.
When repayments become a mental health stressor
The study, published in Social Science & Medicine, analysed 13 years of nationally representative data from the Household, Income and Labour Dynamics in Australia Survey. It followed changes in financial hardship and mental wellbeing among 18,750 adults, excluding retirees and pensioners.
Researchers classified people as high mortgage holders when more than 30% of their net disposable household income went towards monthly repayments. Among those experiencing financial strain, the decline in mental health for this group was roughly three times larger than for other people facing hardship.
The study measured hardship through experiences such as missing bill, mortgage or rent payments, skipping meals, being unable to heat the home, selling belongings or seeking help from charities or family. Mental health was tracked through self-reported symptoms of anxiety and depression.
The findings show an association between mortgage hardship and declining mental health. They do not establish that mortgage costs directly caused the changes.
Hardship intensified after the pandemic period
Researchers compared three periods: 2012 to 2019, 2020 to 2021 and 2022 to 2024. They found no sharp mental health decline among high mortgage holders during the pandemic years. Hardship rose sharply in 2023 and 2024, as interest rates increased and some household savings buffers built during the pandemic were used up.
Dr Lay San Too said pandemic-era income support, mortgage relief and other fiscal and monetary measures may have helped households and businesses manage financial pressure during that earlier period.
Poor mental health was highest among people with large mortgage repayments who had also reported missing payments. The research did not find a comparable decline among renters experiencing rent hardship during the current cost-of-living crisis. Too said renters’ mental health may already have been significantly low before the crisis, rather than being unaffected by financial stress.
Demand for support is growing
Beyond Blue chief executive Georgie Harman said contacts to the service increased by 9% over the past year. She said more people were seeking help with mortgage repayments, housing costs, household bills and the rising price of everyday essentials.
Harman described financial pressure as relentless for some people, leaving them feeling close to being unable to cope after an unexpected expense or setback. She said useful support needs to be both practical and emotional.
Separate research co-authored by Prof Jane Pirkis and published in August found an association between inflation and suicide rates in Australia. Each 1% monthly increase in annual inflation was associated with a 4% increase in suicide rates one month later, with the strongest link among people aged 30 to 69. The finding is an association, not evidence that inflation directly caused a particular death.
Too said prolonged financial distress could contribute to greater demand for mental health services, adding pressure to an already stretched health system.
What people under financial strain can do
Financial stress can make it harder to think clearly and ask for help. The support suggested by Beyond Blue includes:
- Seek free financial counselling: the National Debt Helpline can provide financial guidance.
- Talk to a health professional: a GP or mental health professional can help when anxiety, low mood or persistent worry is becoming difficult to manage.
- Tell trusted people: speaking with family or friends may provide emotional support and practical help.
- Use reliable information: trusted online tools can help people understand and manage money pressures.
Government responses proposed by Pirkis include financial assistance, welfare payments, tax cuts and rebates, subsidies for essential goods and services, protections against utility shut-offs, nutrition programs, stronger social supports, housing-affordability measures and labour-related policies.
For people experiencing mortgage stress, seeking support early may help address both the financial problem and its emotional effects. Financial hardship is not simply a budgeting issue: the research suggests that repayment pressure and missed payments can coincide with substantial mental distress.
AI tools were used to assist with the preparation of this article.
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