Unused Subscriptions: A Costly Habit That Can Affect Your Borrowing Power

A combination of consumer research and banking data indicates that unused subscription services are a common expense for Australians and may be considered by lenders when assessing home loan applications. Financial institutions note that these recurring costs are treated as ongoing financial commitments.

Financial Impact and Lending Assessments

Research from Finder indicates that the average Australian spends $44 per month on streaming services. When other subscription types are included, the annual cost can reach thousands of dollars.

According to Finder personal finance expert Sarah Megginson, lenders include subscription costs in their calculation of an applicant's net disposable income—the amount remaining after monthly expenses.

Megginson stated that the total cost of subscriptions could equate to $2,400 less available per year for potential loan repayments, which may reduce perceived borrowing power.

Consumer Spending and Behavior

Data from Deloitte indicates Australians are spending a record average of $78 per month on subscriptions, an increase from $63 in 2024.

A Finder survey of 1,015 respondents found that 32% of Australians cancelled a streaming subscription in the past 12 months, with 50% of those citing saving money as the reason.

Megginson attributed this trend to rising costs of living, with some households reallocating funds from discretionary spending to essentials.

Individual cases, such as that of Perth resident Ellie Grace, illustrate the potential for savings. After reviewing her subscriptions, which included an unused audiobook service, Grace reported annual savings of approximately $700.

Bank Data and Industry Context

Bankwest reported that 46% to almost 50% of its customers are paying for a subscription they do not actively use.

Bankwest chief digital officer Eleanor Bensley noted that entertainment streaming accounts, led by Netflix and Spotify, were the most common subscriptions among their customers.

Netflix, to which 64% of Australians with a streaming service are subscribed, increased the price of its standard ad-free tier in Australia from $18.99 to $20.99 per month in August 2023.

Management Tools and Recommendations

Bensley stated that actively reviewing discretionary spending is important for both value and for presenting a clear financial profile to lenders.

Megginson recommended periodically reviewing all subscriptions, noting that platforms typically make it easy to cancel and re-subscribe later.

In response to the trend, Bankwest plans to launch a new feature in its app that will allow customers to view and track all their subscriptions in a single location.