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Major risk facing 942,000 Aussies next month

Australian money piled on top of itself and a crowd of people walking down the street to represent Australians becoming at risk of falling into mortgage stress.
Almost 1 million Aussies will be at risk of falling into mortgage stress next month. (Source: Getty)

The cost of living crisis is already putting pressure on Aussie household budgets and interest rate increases have just added to the pain felt by many.

Now, research from Roy Morgan found close to one million Aussies will be plunged into mortgage stress in November.

The research found that an estimated 854,000 mortgage holders are already ‘at risk’ of mortgage stress and that number is expected to blow out to 942,000 next month.

While the numbers are troubling, the proportion of mortgage holders considered to be ‘at risk’ is still well below the high reached during the Global Financial Crisis in early 2009 when 1.45 million Aussies were in mortgage stress.

The Roy Morgan report found that the number of Aussies considered ‘extremely at risk’ was sitting at around 542,000.

‘At risk’ group to grow next month

Mortgage stress is set to increase to nearly 1-in-4 mortgage holders by November, the report found.

As interest rate increases continue, so will Aussies falling into the ‘at risk’ category.

If the RBA increases interest rates by 0.5 per cent in each of the next two months this would mean 24.3 per cent of mortgage holders, or 1.1 million, would then be classified as ‘at risk’.

This would be the most mortgage holders classified as ‘at risk’ since July 2013, just over nine years ago.

Michele Levine, CEO Roy Morgan, said while interest rates are a major factor in mortgage stress, there are other impacts to take into account as well.

“It’s important to consider that interest rates are but one variable that determines whether a mortgage holder is considered ‘at risk’,” Levine said.

“The variable that has the largest impact on whether a borrower falls into the ‘at risk’ category is related to household income – which is directly related to employment.”

“These figures suggest that as long as employment levels remain strong the number of mortgage holders considered ‘at risk’ will not increase to anywhere near the levels experienced during the Global Financial Crisis.”

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