Stephanie Tonkin, Director of Operations + Strategy, Mortgage Stress Victoria at WEstjustice
Even before the recent interest rate rise, an alarming number of Victorians were in mortgage stress. In late March 2022, nearly half (44%) of Victorian households with a mortgage were in mortgage stress.[i] Eight of the top 12 postcodes in Australia experiencing highest numbers of mortgage stress are in Victoria.[ii] Despite unemployment figures below 4%,[iii] mortgage stress and cost of living pressures continue to grow[iv] and interest rates are increasing, all set against a background of record-high household debt levels.[v]
Mortgage stress is, by definition, financial stress.[vi] While a tight financial position might be manageable, as interest rates increase or a life event takes place – injury or illness, relationship breakdown, job loss or underemployment, death in the family, new child – there is significant risk of the household falling into financial crisis and being unable to afford a roof over its head.
Mortgage Stress Victoria is concerned that we have reached the tipping point. Growing financial pressure could lead to a wave of homeowners being evicted from home ownership, and with increasingly limited rental options, falling straight into homelessness.
WEstjustice’s expanded Mortgage Stress Victoria service
WEstjustice has expanded its holistic services for people in mortgage stress to all Victorians: Mortgage Stress Victoria. Our integrated team of lawyers, financial counsellors and social workers are accepting sector referrals and enquiries for any person who:
- Has a mortgage
- Is in financial difficulty
- Is in Victoria.
(referral information is below)
What we help with
Mortgage Stress Victoria helps mortgage-holders to resolve their mortgage debt and many surrounding issues putting housing at risk: other debts/credit issues, fines, family violence/economic abuse, insurance disputes, motor vehicle or workplace accidents, addiction, mental health and gambling issues. We provide urgent Advice + Rights and ongoing casework support.
In recent weeks since opening our services state-wide, we have seen majority of referrals late in the cycle of mortgage stress, involving legal proceedings and notices to vacate. This suggests lenders are picking up their enforcement of mortgage arrears or existing judgment debts following a quiet period during the COVID-19 pandemic, and while the housing market is still strong. We have managed to intervene and put a hold on enforcement for each of these cases, preventing eviction of families from home ownership into homelessness.
Mortgage Stress Victoria helps people across the spectrum of financial difficulty, from early financial difficulty through to default notices, legal proceedings and home repossession. The sooner a person seeks help with their mortgage stress, the more options they will have to deal with the mortgage stress, its drivers and impacts.
Mortgage Stress Victoria’s model is flexible and we can assist with any combination of our three disciplines. For example, our lawyers and social workers can work alongside other agencies’ financial counsellors to help deal with legal proceedings or emotional drivers of mortgage stress. Or, we can accept referrals that include integrated financial counselling work as well.
Please contact us to discuss any of the above, or refer a client:
Please get in touch to refer any clients, discuss the connections between our services, and how we can work together to support a growing wave of consumers in need of support.
[i] Digital Finance Analytics, 2022, ‘Mortgage Stress Grinds Higher [Before Rate Rises]. Accessed online: Mortgage Stress Grinds Higher [Before Rate Rises] – Digital Finance Analytics (DFA) Blog.
[iii] ABS, 2022 Labour Force Australia. Accessed online: Labour Force, Australia, April 2022 | Australian Bureau of Statistics (abs.gov.au).
[iv] Digital Finance Analytics, 2022, ‘Household Stress and Scenario Update’. Accessed online: https://nucleuswealth.com/wp-content/uploads/2022/01/DFA-12-Jan-2022.pdf
[vi] There are various definitions of mortgage stress. One common definition is a lower-income household paying more than 30% pre-tax income on mortgage repayments (ABS). Digital Finance Analytics defines mortgage stress as households in negative cashflow.