People from Australia’s diverse communities are among those at risk from mortgage stress as interest rates continue to rise, industry experts say.

Some estimates say up to 80 per cent of households in some of Melbourne’s most multicultural postcodes were struggling financially mid-last year – well before the most recent rate rises.

Last month, the Reserve Bank of Australia lifted the cash rate by 25 basis points, bringing it to 31 per cent and already some households have started missing their repayments, mortgage brokers say. Pundits say there may be another rate rise next month as inflation remains on the rise.

Founder and chief executive of finance coaching firm Financially Empowered Grace Mugabe said the cost of living crisis and rising interest rates were hitting most people and culturally and linguistically diverse (CALD) Australians and migrants were particularly impacted.

“Some families also have to send money back to relatives in their home country, adding to the pressure,” Ms Mugabe said.

“Migrants often cannot rely on family for financial support and there is a lack of knowledge about the services available – such as the first home buyers’ scheme,” she said.

“Because of this, I have started a program specifically for migrants called ‘Migrant Money Matters’.”

Ms Mugabe said the number of people attending her budget management workshops had increased recently.

Aside from reaching out to their bank, she said people in financial distress should also access important tips on how to better manage their budgets from Financial Counselling Australia and MoneySmart.gov.au.

“But there is a lot more that needs to be done in terms of translating this information from English into various languages,” Ms Mugabe said. 

For those suffering rent stress, Mugabe suggested sharing the dwelling with someone else and splitting the costs.

Mortgage brokers say the full effect of the rate hikes would not be felt for some time yet.

Ms Mugabe said some prospective home buyers who relied on assurances that interest rates would not increase until next year were now struggling.

“A lot more people from the CALD community are seeking financial counselling,” she said.

Broker Ian Pierce said: “We are now starting to see people missing repayments and asking to refinance or look to sell”.

“And the combination of low rental vacancies and higher interest rates is pushing up rental prices as investment property owners pass on interest rate rises to their tenants,” Mr Pierce said.

He said some people were having to make some significant cuts, including taking their children out of private schools or cancelling holidays.

Mr Pierce said some aspiring homeowners who had house and land packages approved previously now no longer wanted to proceed.

“Twelve months ago they were told everything is fine, that they could borrow whatever the amount and all would be OK. But 12 months later, things are different,’ he said.

Mr Pierce urged those struggling to meet their mortgage repayments to speak to their bank or the mortgage broker, so they could revisit the loan and search for better deals.

People suffering financial stress can obtain free advice from the ASIC’s moneysmart service at Financial advice – Moneysmart.gov.au

Or from the National Debt Helpline Welcome Page – National Debt Helpline (ndh.org.au)