Why younger homebuyers risk being locked in mortgage prison

November 9, 2026 — 4:01am

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As interest rates hit 18-year highs, households stretched by their mortgages are naturally on the hunt for anything that will ease the pain.

Supermarkets see all sorts of examples of this, from strong sales of home brand products, to shoppers embracing cheaper food options such as mince, or a surge in customers chasing down specials at rivals (so-called “cross shopping”).

But how to ease the pain on many households’ biggest expense, their home loan?

The banking equivalent to scanning the Aldi catalogue for specials is refinancing: dumping your bank for a cheaper rival. However, recent figures suggest there’s a significant cohort of borrowers who may struggle to do this, even if it would make a lot of sense for them to do so.

That’s because of a problem dubbed “mortgage prison” – where customers effectively get stuck with their bank because they can’t meet the lending criteria needed to switch to a rival.

This year’s five interest rate hikes are........

© Brisbane Times