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Grim mortgage reality facing 1.4 million Aussies

Mortgage stress is at its highest level since May 2008.

Tamika Seeto
·Finance Reporter
·2-min read
Homes in Australia. Australian money. Home loan mortgage concept.
Rising interest rates have seen many Aussie households fall into mortgage stress. (Source: Getty)

A staggering number of mortgage holders have been pushed into mortgage stress, as interest rates hit their highest level in more than a decade.

An estimated 1.43 million mortgage holders - or 28.7 per cent - were considered to be ‘at risk’ of mortgage stress in the three months to June this year, according to new research from Roy Morgan.

This is the highest level since May 2008 and up 539,000 from last year when the Reserve Bank of Australia (RBA) had just started rapidly increasing interest rates from 0.10 per cent to 4.1 per cent.

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The data, which is based on interviews with more than 10,000 mortgage holders, takes into account all 12 of the RBA’s interest rate hikes.

Roy Morgan CEO Michele Levin said the number of Aussies in mortgage stress would increase if the RBA decided to hike interest rates again next week.

“If the RBA does raise interest rates again next week by 0.25 per cent, Roy Morgan forecasts mortgage stress is set to increase to over 1.51 million mortgage holders (30.0 per cent) considered ‘At Risk’ by August 2023,” Levin said.

“Of even more concern is the rise in mortgage holders considered ‘Extremely At Risk’, now estimated at 943,000 (19.6 per cent) in June, 2023 – the highest for over a decade, since September, 2011 (22.6 per cent).

“This is an increase of over 400,000 mortgage holders from a year ago (+7.8 percentage points).”

If there was a sharp rise in unemployment, Levin said mortgage stress numbers could increase towards the record high of 35.6 per cent, reached during the Global Financial Crisis in early 2008.

The RBA will hold its next board meeting on Tuesday, after hitting the pause button on rates for July.

A mortgage holder with a $500,000 loan has seen their monthly repayments increase by $1,134 since the rate hikes began in May last year, according to RateCity research.

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