New Study Predicts Further Mortgage Stress for Homeowners
New Study Predicts Further Mortgage Stress for Homeowners
The information on this website is general in nature and does not take into account your objectives, financial situation, or needs. Consider seeking personal advice from a licensed adviser before acting on any information.
With persistent interest rate hikes coming from the Reserve Bank of Australia (RBA), a new study by Roy Morgan has revealed that 25.3% or 1.23 million of Australian mortgage holders were classified as 'At Risk' of mortgage stress in the three months leading up to February 2023.
This number marks the highest point since September 2011's 1.3 million, and it's expected to rise even higher if inflation doesn't slow down.
The Australian Bureau of Statistics (ABS) quarterly CPI figures for the year to December 2022 showed Australian inflation reaching a 33-year high of 7.8%, but a new monthly ABS inflation indicator revealed inflation slowing to 7.4% in the year to January 2023. The latest statistics for February 2023 are yet to be released, and they may influence the RBA's decision to halt their series of interest rate increases.
If the RBA does follow the example of central banks overseas and raise interest rates by another 0.25%, Roy Morgan predicts that mortgage stress levels will increase to over 1.45 million by April 2023, marking 28.8% of all mortgage holders-the highest point since September 2011. According to the study, two further interest rate hikes by 25 basis points each will drive the number of mortgage holders considered 'At Risk' up to 31.0% or 1.565 million by May 2023.
Understanding Mortgage Stress Factors
While interest rates are a major contributing factor in determining whether a borrower is 'At Risk', Roy Morgan CEO, Michele Levine explains that household income related to employment is the variable with the largest impact. Losing jobs or a primary source of income has a more significant effect on paying mortgages than interest rates.
In February 2023, a near-record 13.5 million Australians were employed, up by over 600,000 since February 2020 pre-pandemic. The strong growth in the jobs market has attracted more Australians into the labour force, but there are now over 1.5 million unemployed Australians, roughly 10.1% of the workforce, compared to 1.17 million pre-pandemic. Therefore, unemployment is a significant determinant of mortgage stress.
It's important to note that while the number of Australians deemed 'At Risk' of mortgage stress has risen by 514,000 or 8.5% since the last year, this number remains below the record high of 35.6% or 1.45 million during the Global Financial Crisis (GFC) in early 2009. Nonetheless, homeowners may need to start making careful considerations to avoid long-term financial difficulties.
Seek out Expert Advice
With the potential for further interest rate hikes and a rising number of mortgage holders at risk of mortgage stress, it's crucial for homeowners to seek expert advice on how to manage their loans effectively. Consider refinancing to lock in a fixed rate mortgage or explore other options that may be more suitable for your financial situation. Ignoring the situation may lead to long-term financial difficulties.
Please Note: We do not endorse any specific products or companies. Some content is sourced from third parties, including press releases, and may not be independently verified for accuracy or completeness.
The Reserve Bank of Australia’s 3 November 2026 decision to lift the cash rate target by 25 basis points to 4.85 per cent gives personal loan borrowers a fresh reason to check the full cost of credit, not just the advertised interest rate. The move follows the RBA’s assessment that inflation is likely to stay elevated for longer than previously expected, keeping pressure on household budgets and lender pricing. - read more
The Reserve Bank of Australia’s October 2026 Financial Stability Review offers a measured but important message for households weighing up personal loans: most borrowers remain resilient, yet pressure on budgets has not disappeared. The review, prepared using data available to 25 September 2026, points to higher inflation and interest rates as key reasons real household disposable income slipped slightly in the first half of the year. - read more
The Reserve Bank of Australia’s latest retail payments update offers another useful snapshot of how households are managing everyday spending, card use and short-term credit. While payment data is not the same as loan approval data, it can still tell borrowers something important: the way money moves through a household each month can affect how comfortable a lender feels about future repayments. - read more
A personal loan lets you borrow a set amount and repay it over time, usually with interest and fees. This guide explains how personal loans work in Australia, including repayments, terms, eligibility checks, costs and borrower responsibilities. - read more
Embarking on the journey to secure a personal loan can often seem like navigating through a complex financial landscape. Particularly for Australians, where the market is bustling with a multitude of lenders each with their respective criteria and rates, increasing the chances of loan approval is a pursuit that requires insight and preparation. - read more
Refinancing a personal loan means replacing your existing loan with a new one, usually to seek different interest rates, repayment terms, fees or loan features. It can be useful in some situations, but the benefits need to be weighed against costs, credit checks and the risk of paying more over time. - read more
Knowledgebase
Mortgage Insurance: Insurance that protects a lender in case a borrower defaults on their mortgage.
No comments yet. Be the first to share your thoughts.