Feeling the squeeze? What to do if your repayments are getting harder

What the RBA found

The RBA’s October 2026 Financial Stability Review, released 1 October, found:

• Arrears “remain low despite a recent pick-up” and sit around pre-pandemic levels.
• Fewer than 2% of variable-rate owner-occupiers had a cash-flow shortfall at the end of June, meaning their income didn’t cover repayments plus essentials (as reported by the ABC).
• The median borrower had buffers worth more than a year of repayments.

The data was collected before the 29 September rise (MPA), so the full effect of this year’s increases is still to come.

Warning signs

• Using credit cards or buy-now-pay-later to cover bills.
• Drawing down your offset month after month.
• Missing, or nearly missing, a repayment.
• A fall in income.

Step 1: Contact your lender early

Lenders have hardship teams. Under the National Credit Code you can request a hardship variation. Options may include temporarily lower repayments, an interest-only period or a longer loan term. Most of these mean paying more interest over time.

Step 2: Get free, independent help

• National Debt Helpline: 1800 007 007 (ndh.org.au), for free financial counselling.
• Australian Financial Complaints Authority (AFCA): free dispute resolution if you can’t resolve things with your lender.

Step 3: Review your loan carefully

• Valuation: Canberra values are down 1.6% over the year and 6.2% from the 2022 peak (Cotality), so your LVR may be higher than you think.
• Reassessment: a new lender will test you at your rate plus 3 points (APRA).
• Costs: expect discharge, application and government fees.

If you are already behind, speak to your lender or a financial counsellor first.

Step 4: Look at your rates bill

The ACT Revenue Office runs a rates deferral scheme. If paying your rates would cause significant hardship, you can apply to delay payment on your principal place of residence until a later date, or until the property is sold or transferred. Simple interest applies at a concessional rate on the deferred amount.

Deferral is open to holders of a Services Australia Health Care Card or Low Income Health Care Card, and to others who can demonstrate significant financial hardship by completing a Financial Hardship Questionnaire. Separate arrangements exist for pensioners and for owners aged 65 or over with at least 75% equity in their home.

This doesn’t reduce what you owe, but it can free up cash while you sort out the bigger picture. Details are at revenue.act.gov.au, or call the ACT Revenue Office on (02) 6207 0028.

Alongside that, track a month of spending so you know exactly where you stand before you talk to anyone.

What this means for you

The worst option is waiting. Contact your lender, call the National Debt Helpline, and if you want to know whether a loan review is realistic, talk to our refinancing team or contact us confidentially.

Sources

• Reserve Bank of Australia, Financial Stability Review, October 2026 — https://www.rba.gov.au/publications/fsr/2026/oct/resilience-of-australian-households-and-businesses.html
• ABC News, RBA relaxed about housing downturn, 1 October 2026 — https://www.abc.net.au/news/2026-10-01/rba-financial-stability-review-october-2026/107215072
• MPA, Mortgage arrears stay near pre-pandemic levels — https://www.mpamag.com/au/news/general/mortgage-arrears-stay-near-pre-pandemic-levels-reserve-bank-finds/592031
• Cotality, Home Value Index, October 2026 — https://discover.cotality.com/hubfs/Article-Reports/COTALITY%20HVI%20OCT%202026%20FINAL.pdf
• ACT Revenue Office, Financial hardship (rates deferral) — https://www.revenue.act.gov.au/cost-of-living-support/rates-assistance/financial-hardship
• ACT Revenue Office, Rates assistance — https://www.revenue.act.gov.au/cost-of-living-support/rates-assistance
• National Debt Helpline — https://ndh.org.au
• Australian Financial Complaints Authority — https://www.afca.org.au