Cost of living crisis triggering worsening mental health issues for millions of Australia as RBA denies further mortgage relief

Sky News AU

09-07-2025

Almost half of Australians admit cost of living pressures are impacting their mental health as millions were denied further relief earlier this week when interest rates were held.
Fresh research from Compare The Market found 48.7 per of Australians now experience or have heightened feelings of anxiety or depression due to money pressures.
Gen Z was faring the worst with price pressures as 72 per cent of respondents to the comparison site's survey reported mental health strain over money woes.
Millennials followed with about 56 per cent saying they felt mental health challenges over cost of living pressures, while 48 per cent of Gen X and 29 per cent of Baby Boomers reported the same.
Compare The Market's economic director and former Sunrise host David Koch noted the mentally debilitating impact cost of living pressures had particularly on young Australians.
'For many, it feels like an uphill battle to pay rent, bills and groceries, afford to socialise, and try to have savings for a home deposit when almost everything is climbing up,' Mr Koch said.
'But don't let money stress control you. Please reach out to your family, friends or a counsellor if you need help.
'There are financial hardship assistance programs available from many insurers, energy providers and home loan lenders, too.'
It comes after the Reserve Bank of Australia denied mortgage holders what would have been the first consecutive interest rate cuts since 2020.
The additional cut would have reduced monthly mortgage repayments for a household with a $600,000 loan by $90, while those with a $1m mortgage would save $150, according to Money.com.au.
A lower cash rate would have improved borrowing capacities for prospective buyers, but this may have been counteracted by higher property prices.
REA Group senior economist Anne Flaherty said the shock rate hold would weigh on household budgets and may slow price growth seen after the February and May cuts.
'For many, affordability constraints continue to weigh heavily, as many households grapple with stretched budgets,' Ms Flaherty said.
Compare The Market's report showed one in five Australians reported the onset of anxiety or depression which they had never experienced before.
More than a third of respondents said they were sleeping less due to money stress, while nine per cent said the pressures had strained their marriage or romantic relationships.
Alongside this, about four per cent said fiscal pressures had strained their relationship with their children, nine per cent said it impacted their relationship with their parents and nine per cent said they could no longer afford to socialise as much.
Mr Koch urged Labor to continue its cost of living relief measures as Aussie households battle with tight budgets.
'Immediate bill relief is essential, but the country cannot survive on band-aid solutions,' Mr Koch said.
'It's critical that the government delivers its election promises and longstanding economic reform to set Australians up for a brighter future.'