Sign up for the Breaking News Australia email<\/a><\/p>\n Dr Lay San Too, a senior research fellow at the University of Melbourne specialising in mental health and suicide prevention, wanted to understand how widespread the mental health impact of financial pressure is, the expenses hitting hardest, and whether this is worsening.<\/p>\n In a study published in the journal Social Science & Medicine<\/a> on Friday, they found mortgage holders who, like Knights, were allocating more than 30% of their disposable income towards housing repayments experienced a decline in mental health roughly three times larger than that of others experiencing financial strain.<\/p>\n \u201cAs many Australian mortgage holders have variable-rate mortgages, higher interest rates alongside rising living costs have worsened their financial pressures and, in turn, the impact of this pressure on their mental health,\u201d Too says.<\/p>\n The researchers analysed 13 years of nationally representative data from the Household, Income and Labour Dynamics in Australia (Hilda) Survey, a long-running study that tracks economic and personal wellbeing, labour market dynamics, and family life.<\/p>\n They examined the change in prevalence of financial hardship and mental wellbeing of 18,750 adults, excluding retirees and pensioners.<\/p>\n Emily Knights says the financial pressure of her mortgage is affecting her relationships: \u2018The girls say, \u201cLet\u2019s catch up for dinner,\u201d and I say, \u201cI can\u2019t.\u201d\u2019 Photograph: Christopher Hopkins\/The Guardian<\/p>\n They broke the data down to time periods described as the \u201ccost-of-living crisis era\u201d (2022-2024); the \u201cCovid pandemic era\u201d (2020-2021); and the \u201cpre-crisis era\u201d (2012-2019).<\/p>\n The study found no sharp mental health decline among high mortgage holders (those allocating more than 30% of their net disposable household income toward monthly repayments) during the pandemic years \u2013 but hardship jumped sharply in 2023 and 2024 as interest rates rose, and household savings buffers that some people had accumulated during the pandemic were exhausted.<\/p>\n Too says this may be because governments and financial institutions introduced substantial support measures during the pandemic.<\/p>\n \u201cIncome support, mortgage relief, and other fiscal and monetary policy measures helped many households and businesses manage the financial pressures they were facing at that time,\u201d she says.<\/p>\n While interest rates have been increased primarily to bring inflation under control, for households with large variable-rate mortgages, Too says \u201cthose rate rises can translate into substantially higher monthly mortgage repayments\u201d.<\/p>\n Financial hardship was measured by whether someone missed a bill, mortgage, or rent payment, skipped meals, couldn\u2019t heat their home, sold belongings, or sought help from charities or family.<\/p>\n The study excluded comfortable, voluntary mortgage over-payers, instead requiring participants to report financial stressors and active mortgage hardship.<\/p>\n Mental health was tracked through self-reported anxiety and depression symptoms from the group over time.<\/p>\n Poor mental health was highest among those with large mortgage repayments and who had reported missing payments, the study found.<\/p>\n \u201cWe did not find a decline in mental health among those experiencing rent hardship, particularly those with high rental payments, during the current cost-of-living crisis compared with the pre-crisis period,\u201d Too says.<\/p>\n This is not because the mental health of renters is good, she says, but because their mental health was already at a significant low before the cost-of-living crisis.<\/p>\n skip past newsletter promotion<\/a>Free newsletter |When needed<\/p>\n Sign up to Breaking News Australia<\/p>\n Get the most important news as it breaks<\/p>\n after newsletter promotion<\/p>\n Overall, financial hardship rose more and was associated with greater mental distress during the cost-of-living crisis than through the Covid era.<\/p>\n If governments don\u2019t act on this distress, Too says \u201cover time, this could contribute to greater demand for mental health services [and] place additional pressure on an already stretched health system\u201d.<\/p>\n The Beyond Blue chief executive, Georgie Harman, says the number of people contacting the mental health support service has increased by 9% over the past year, with growing demand for support from people struggling with mortgage repayments, housing costs, household bills and the rising cost of everyday essentials.<\/p>\n \u201cIncreasingly, people are carrying a level of financial pressure that feels relentless,\u201d Harman says.<\/p>\n \u201cWe\u2019re hearing from people who describe feeling like they\u2019re just one unexpected expense, whether that\u2019s a car repair, surprise bill or setback, away from things becoming unmanageable.\u201d<\/p>\n Prof Jane Pirkis, director of the University of Melbourne\u2019s centre for mental health, co-authored a paper<\/a> published in August that found every 1% monthly increase in annual inflation in Australia is associated with a 4% increase in suicide rates one month later.<\/p>\n \u201cInflation is having a major impact on people\u2019s mental health,\u201d Pirkis says.<\/p>\n Her research found the strongest link between inflation surges and suicide rates in 30 to 69-year-olds, ages where people \u201care often not only financially responsible for themselves but also for other family members\u201d, she says.<\/p>\n \u201cThis may create an added level of burden when inflation means that they are struggling to provide for dependents.\u201d<\/p>\n Pirkis says governments need to consider a range of policies to prevent significant mental health crises as a result, such as financial assistance, welfare payments, tax cuts and rebates, subsidies on essential goods and services, eviction moratoria, utility shut-off protections, nutrition programs, measures to strengthen social support systems and housing affordability, and labour-related policies.<\/p>\n Harman says the most effective support for those mentally struggling due to financial strain \u201cis both practical and emotional\u201d.<\/p>\n \u201cThat might mean accessing free financial counselling through services like the National Debt Helpline<\/a>, talking with a GP or mental health professional, reaching out to family and friends, or using trusted online tools and information to better understand and manage money stress,\u201d she says.<\/p>\n![\"\"](\"https:\/\/www.newsbeep.com\/ie\/wp-content\/uploads\/2026\/09\/1789705337_323_2998.jpg\")
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