Mortgage stress can affect anyone, regardless of where you live or how much your property is worth. Although interest rates do play a part in creating mortgage stress, more often than not the real cause lies with an unexpected life event; unemployment, illness, injury and relationship breakdown are some of the most common causes of mortgage stress. This puts real pressure on homeowners to pay their loan repayments on time.

Preventing mortgage stress

The best solution for managing mortgage stress is to put in place strategies to avoid it altogether. Two key areas that can help you manage your mortgage and prevent mortgage stress are:

• Sit down and create a good budget based on your current financial situation and goals. Consider what is necessary, what is desired and what is truly wasteful. Remember, you do need to allow some ‘fun’ or discretionary money’ in your budget.
• Try to build a ‘buffer’ into your home loan by making additional repayments whenever possible. This will give you some leeway if you do find yourself in temporary difficulties. You can achieve this by simply making fortnightly payments at 50% of your normal monthly payment, making additional payments, or saving additional money into an offset account.