Customers were thinking more carefully about their living expenses and considering where they could cut back as interest rates rose.

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The cuts have generally been made on leisure and entertainment spending, such as restaurants and subscriptions to streaming services.

Banks were also watching spending more closely, Landahl said, though there were no formal policy changes, and he didn’t think any were needed given buffers were already in place.

“The impression we’re getting from conversations with appraisers…is that there’s a closer eye to ensuring spending all makes sense and reflects cost-of-living pressures – particularly around some of those areas of inflationary pressure like transportation, food, and groceries.”

In Melbourne, Will Unkles, director of 40Forty Finance, said rising interest rates had the biggest impact on the amount of money people could borrow, but the rising cost of living was also hitting people. home buyers.

Higher rent, food, gas and energy bills meant people couldn’t save as much for a deposit.

“It hurts people’s ability to save as much as before,” Unkles said.

“Anyone getting a mortgage has to be very careful about where they’re spending their money and deciding what’s a need and what’s a want.”

Unkles said those who want to upgrade their car or go out for expensive dinners might have to give it up, in order to qualify for the mortgage they need to buy.

Mortgage Choice Elsternwick broker Christopher Ladley said banks are looking closely at people’s living expenses.

“The bank will always have an idea of ​​what your living expenses should be and that’s increased by the extra cost of strawberries and lettuce,” he said.

Interest rates have had an impact, hitting those looking to borrow more, such as first-time home buyers struggling to save a larger deposit.

Andean Mortgage Brokers’ Andrew Kostanski said he advises buyers to lower their living expenses before applying for a mortgage.

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“By the time they come to see me, people have usually adjusted their spending, and if they haven’t, and they’re spending a bit too much, then they have to get rid of the credit card and come back to see me in a few months, that’s what I advise them.

This can cause a delay in the time it takes people to get a loan while they wait to adjust their spending.

Scott Partridge, director of Mortgage Choice Castle Hill and Baulkham Hills, said living expenses were a priority for his clients but hadn’t affected their ability to borrow much yet, although it was likely to to change.

“We don’t see a rush of lenders changing their HEM [household expenditure measure] with rising inflation, but I expect that to happen over the next 12 months,” he said.

Existing borrowers would likely feel the pinch more from rising interest rates and spending, Partridge said. But it would also make it harder for first-time homebuyers to save a deposit, in addition to affecting their ability to borrow.