Renters are hitching their belts even tighter than mortgage holders as rising prices erode their savings capacity.
Commonwealth Bank data suggests those aged between 25 and 29, who are likely facing sharp rental increases, are pulling back on spending more than any other group.
Young renters are also likely to be saving less than normal as high costs for food, energy and rent limit the amount they can squirrel away.
Fronting a parliamentary committee on Thursday, the leadership team of Australia's biggest bank outlined how different cohorts are responding to higher interest rates and cost of living pressures.
CBA chief executive Matt Comyn echoed his counterparts from Westpac, ANZ and NAB who said the number of households failing to make their repayment on time was still very low by historical standards.
But he said it was clear many households were under pressure, pulling back on discretionary spending and dipping into their savings.
While renters are hurting most, young home owners are also suffering, with one-third who bought during the pandemic reducing their spending more than 30 per cent year-on-year.
Those who own homes outright, older Australians, were recording the least financial strain, the CBA boss said.
Despite a clear deterioration in financial circumstances for customers, Mr Comyn said the strong labour market meant most were in a position to meet their mortgage repayments.
"The employment market remains very strong and the vast majority, almost all of our customers, continue to work," he said.
Westpac chief executive Peter King also reported resilience across most of its consumer and business customers.
"We recognise it will get harder from here and encourage customers to call us early if they need help," he said in an opening statement.
The Big Four banks control about 80 per cent of the Australian market but Mr King said the major players were losing customers to smaller competitors.
He said refinancing was at its highest point in 20 years and 17 per cent of Australians switched banks last year.
"It's the most competitive I've seen in my 30 years in banking."
On stress-testing borrowers, Mr Comyn said CBA was offering a lower serviceability buffer of one per cent to a small proportion of loans under a "very limited set of circumstances".
"We've recently adopted that and we're comfortable with that," he said.
"And we're not seeing that having a significant effect in terms of impact to customers."
Easing lending requirements has been up for discussion in the context of mortgage holders finding themselves unable to meet stress-testing requirements to refinance to a better deal.
Mr Comyn said the three per cent serviceability buffer, in general, remained "entirely reasonable" given the levels of uncertainty across the industry at the moment.
