For most Australians, a mortgage is the largest financial commitment they will ever make.
Yet according to the recent Australia’s Broken Mortgage Market report by the Consumer Policy Research Centre (CPRC) and Mortgage Stress Victoria (MSV), many Australian borrowers shoulder significantly more risk than homeowners in comparable countries. The report argues that Australia’s mortgage market, with its heavy reliance on variable-rate lending, limited long-term fixed-rate options and inconsistent support mechanisms, often leaves households vulnerable when financial circumstances change.
The report raises an important and constructive question: how can Australia’s home loan market share risk more fairly, expand meaningful customer choice and support long-term financial stability? Addressing this question is an opportunity to build a mortgage system that works more effectively for households, lenders and the broader community.
A Market Built Around Uncertainty
One of the report’s most striking findings is Australia’s overwhelming dependence on variable-rate mortgages.
In September 2024, approximately 97% of new home loans were written on variable rates, while fixed-rate lending accounted for just 3% of new loans. This means most borrowers choose from a market where variable-rate products are the dominant option, leaving many households more exposed to movements in interest rates over the life of their mortgage.
For households already managing rising living costs, family responsibilities and employment uncertainty, changes in interest rates can make long-term financial planning more challenging. Repayments may increase or decrease over time, making it harder for some borrowers to plan with confidence and align their mortgage commitments with their broader financial goals.
The report highlights countries such as the United States, Denmark, Canada and South Korea, where borrowers have access to a broader range of long-term fixed-rate mortgage products. These options can support informed decision-making by allowing customers to choose between repayment certainty and other lending features based on their individual circumstances and preferences. While no mortgage system is without its challenges, these markets demonstrate how greater product diversity can give borrowers more flexibility, predictability and control over their financial future.
Loyalty Shouldn’t Come at a Cost
The report also highlights concerns that long-term customers can end up paying more than new borrowers.
Many Australians stay with the same lender for years, often transitioning between mortgage products without actively reviewing whether more suitable or competitive options are available. According to the report, there is merit in exploring mechanisms that prompt regular customer engagement, ensuring borrowers are aware of their choices and have the information needed to assess whether their current product continues to meet their needs and objectives.
This reflects a broader principle that is gaining attention across a number of industries: customer loyalty should be accompanied by ongoing opportunities to make informed choices and access products that deliver fair value over time.
Support Should Be Consistent
Another key finding centres on affordability support.
The report found that customers may experience different levels of support depending on the type of lender they use. It highlights the importance of more consistent standards across the sector, particularly for customers whose circumstances have changed due to illness, injury, unemployment, family violence or other unexpected life events.
Among its recommendations is a national Mortgage Charter that could establish clearer, more consistent expectations for early intervention, affordability assistance and customer protections. Designed well, such a framework would encourage lenders to recognise emerging challenges sooner, communicate available options in plain language and work with customers on fair, sustainable solutions. It would also give customers greater confidence about where to turn and what support they can expect when circumstances change.
A Broader Conversation About Financial Wellbeing
While the report focuses on mortgage products, its findings point to a much broader reality: financial circumstances can change quickly and unexpectedly.
Whether managing a mortgage, personal loan or other financial commitment, most Australians are likely to experience periods where affordability becomes more challenging. Financial systems are most effective when they help customers identify issues early, access support quickly and make informed decisions before financial pressure escalates.
This is where communication matters.
Research consistently shows that respectful, customer-centred engagement leads to better outcomes than language that creates stigma, blame or unnecessary anxiety. Francom’s Debt Collection Language Toolkit was developed with this principle at its core, supporting conversations that give customers clear information, help them understand their choices, and encourage informed decisions about the support and solutions available to them. By focusing on affordability, practical pathways forward and collaborative problem-solving, the toolkit helps create a more positive and empowering customer experience.
The Francom Effect
At Francom, we believe that better financial outcomes begin with understanding each customer’s individual circumstances.
We recognise that affordability challenges can arise for many reasons, and no two situations are the same. Our ethical responsibility is to listen without judgement, protect each customer’s dignity and work transparently toward practical solutions. By combining respectful communication with early engagement and collaborative problem-solving, we help customers identify sustainable pathways that reflect their circumstances and support lasting financial wellbeing.
Through our customer engagement practices and complimentary financial wellbeing resources, we aim to equip people with the knowledge, tools and confidence they need to make informed decisions about their financial commitments.
The CPRC and MSV report contributes to an important national conversation about how Australia’s mortgage market can better support customers over the long term. The way forward is practical: broaden meaningful product choice, improve transparency, intervene early and apply consistent protections that preserve dignity and promote fair outcomes. When lenders, service providers, policymakers and community organisations work together around these principles, we can build a system that gives customers greater confidence their mortgage will remain manageable, strengthens trust and supports financial wellbeing across the community.
References
Consumer Policy Research Centre (CPRC) & Mortgage Stress Victoria (MSV) 2026, Australia’s Broken Mortgage Market, Consumer Policy Research Centre, Melbourne.