Homeowners in Geelong are grappling with the ongoing challenges of rising interest rates, with a recent report highlighting the region as one of the worst in Australia for mortgage arrears in 2025. According to S&P Global, nearly one in 50 borrowers in Geelong are now more than 30 days late on their mortgage payments, despite three interest rate cuts earlier this year.
The report indicates that other areas, such as Melbourne’s southeast and northwest, as well as the Gippsland-Latrobe region, have even higher rates of mortgage arrears. Erin Kitson, a director at S&P Global, noted that while much of Australia may have already passed the peak of mortgage distress, Geelong’s situation remains precarious.
Current Situation for Geelong Homeowners
The decline in mortgage-related difficulties across the country has been attributed to several factors, including rising property values and a 3 percent mortgage buffer mandated for lenders. Kitson explained that as the number of borrowers facing difficulties decreases, lenders typically become more competitive, which could positively influence home prices. “You will see arrears continuing to gradually come down,” she stated. “What will be interesting on the lending front will be what happens to mortgage competition and refinancing levels.”
Despite these hopeful indicators, the report suggests that areas like Geelong, where property values have struggled, may experience a slower recovery. Homeowners unable to keep up with repayments are less likely to sell their properties before falling into arrears, which can complicate their financial situations. Kitson emphasized the importance of having equity, stating, “If you have equity, that enables you to voluntarily sell and get out of your position.”
Local Insights and Strategies
Geelong mortgage broker Matt Turner from GSE Finance reported that many clients are actively seeking ways to manage their mortgage obligations. “We’ve actually been reasonably proactive with our client base prior to the rate cuts and even since, just to check in and see how everything’s going,” he said. Turner has observed that certain areas within Geelong have experienced more significant declines in property values, creating challenges for homeowners looking to refinance.
He pointed out that some borrowers are increasing their loan terms to reduce monthly repayments, something he typically does not recommend. “The way the interest rate buffer works meant that some clients fell into that mortgage prisoner situation,” he noted. He suggested that access to better refinancing opportunities could alleviate some financial pressure for these homeowners.
While the recent rate cuts have offered some relief, Turner indicated that many borrowers still feel the pressure of their mortgage payments. “The good news is most were able to adjust their budgets around their mortgage repayments,” he added, noting that this has allowed some to maintain higher minimum payment levels.
Local real estate agent Peter Norman from Ray White Lara has also experienced the impact of mortgage distress in the area. He shared insights about the current market, stating that many distressed sales occur when homeowners choose to sell their properties before facing bank repossession. This trend highlights the ongoing struggles faced by borrowers in Geelong as they navigate the complexities of the current economic landscape.
As the situation evolves, it remains to be seen how Geelong homeowners will manage their financial challenges, particularly in light of fluctuating interest rates and property values.
