Borrowers pivot to savings as rate pressures rebuild

Paying down debt is still the main focus for households with a home loan, yet it is no longer as overwhelming as late 2025.

The share of mortgage holders who rank repayments as their top financial priority dropped from 71 per cent in December to 62 per cent in February, opening space for a noticeable swing towards savings.​

Nearly one in three mortgage holders now says savings is their number one priority, up from 21 per cent in December to 29 per cent in February.

This marks a clear behavioural shift for indebted households, who appear to have used the short window of relief from last year’s rate cuts to rebuild rainy‑day funds before higher borrowing costs potentially came into effect.

Agile Market Intelligence director Michael Johnson said borrowers made the most of the short‑term reprieve.

“Mortgage holders have been prioritising savings for the last month due to the interest decrease last December and continue to prioritise this despite the increase in interest by 0.25 per cent this February,” he said.

Yet he cautioned that the new savings focus may be put to the test as the year unfolds.

“It remains to be seen if this will be a consistent trend as the predicted price hikes and inflation rates occur in the months to come,” Johnson said.

Day‑to‑day expenses remained a distant third for mortgage households, with only 9 per cent nominating everyday costs as their main concern, underlining how tightly the cohort is still oriented around the tug of war between debt and savings.

Savings still dominate the national picture

Zooming out, savings remain the dominant theme across the nation, even as more Australians begin to worry about their everyday bills.

Overall, 47 per cent of respondents said building savings was their top priority, compared with 27 per cent who put day‑to‑day expenses first and 26 per cent who were focused primarily on paying down debt.​

Since January, the proportion of those prioritising savings slipped by 1 percentage point, while concern about day‑to‑day expenses edged higher, reflecting the ongoing nature of rising living costs.

The survey found that cost‑of‑living pressures crept up in late 2025, though small offsets in categories such as health and power briefly freed up capacity for households to put more cash aside.​

Among Australians carrying consumer debts such as credit cards or personal loans, 42 per cent ranked savings as their main priority, ahead of 31 per cent who revealed they were most worried about their debts.

In this group, concern about debts fell 4 percentage points since January, while the share focused on savings rose by 2 points, signalling a modest easing in short‑term pressure for some borrowers.​

Debt‑free households watch the rate cycle

The picture is different for those with no mortgage or consumer debt, with the category remaining the most savings‑focused cohort, despite their attention nudging towards living costs and future borrowing.

Three in five debt‑free Australians (61 per cent) still named savings as their top priority.

However, the result is down 3 points since January.​

Over the same period, the share of the cohort prioritising day‑to‑day expenses rose from 35 per cent to about 37 per cent, while the proportion concerned about debts climbed from 2 per cent to 4 per cent.

Agile Market said the RBA’s move to hike the cash rate may be prompting households to think about future loans – including mortgages – which now come with higher interest charges.

The monthly study of around 1,500 Australians tracks how borrowers and other households are balancing savings, day‑to‑day expenses, and debt repayment at a time of stubborn cost‑of‑living pressures.

[Related: FHBs return in force as lending surges]