RBA's decision to hold rates offers no relief as cost-of-living pressures mount
Nearly half of Australians are experiencing increased mental health issues due to ongoing cost-of-living pressures, with younger generations the most affected, according to a new urvey.
Research released by comparison site Compare the Market shows that 48.7% of Australians report heightened feelings of anxiety or depression related to financial stress. The findings follow the Reserve Bank of Australia’s (RBA) decision to keep the official cash rate unchanged earlier this week, denying borrowers any further relief.
Younger Australians are feeling the most pressure, according to the survey. Among Gen Z respondents, 72% said money worries were affecting their mental wellbeing. The impact was also high among millennials (56%), with Gen X (48%) and baby boomers (29%) also reporting mental health strain.
“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,” said David Koch, economic director at Compare the Market.
“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.”
The cost of living crisis plaguing households across the country is triggering exacerbated mental health issues for millions of Australians, new research has found.
— Sky News Australia (@SkyNewsAust) July 9, 2025
The RBA’s decision to hold the cash rate means mortgage holders will not see a second consecutive interest rate cut — something not seen since 2020. According to Money.com.au, a further 25-basis-point cut would have lowered monthly repayments by about $90 on a $600,000 loan and $150 on a $1 million mortgage.
A lower rate could also have boosted borrowing capacity for homebuyers, although this may have been offset by continued growth in property prices.
The survey also revealed that 20% of Australians are experiencing anxiety or depression for the first time. More than a third reported sleep disruption due to financial stress, while 9% said it had strained their romantic relationships. Other respondents cited impacts on relationships with parents and children, as well as reduced ability to socialise.
Koch called on the government to continue providing targeted support. “Immediate bill relief is essential, but the country cannot survive on band-aid solutions,” he said.
“It’s critical that the government delivers its election promises and longstanding economic reform to set Australians up for a brighter future.”
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