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Mortgage stress at highest level since 2008: 1.4 million Aussies ‘at risk’

Rising interest rates, low wages growth and rising unemployment have seen many households fall into mortgage stress.

Eliza Bavin
·Personal Finance Editor
Updated ·2-min read
A composite image of Australian money and the aerial view of houses in a suburban area of Australia to represent mortgage payments rising.
Millions of Aussies are falling into mortgage stress thanks to rising interest rates. (Source: Getty / AAP)

If it sounds bad, that’s sadly because it is. The amount of Aussies in mortgage stress has increased to its highest level since August 2008 - when the country was caught up in the Global Financial Crisis (GFC).

An estimated 1.4 million mortgage holders (2.78 per cent of all mortgage holders) were considered to be ‘at risk of mortgage stress’ in the three months to April this year, according to new research from Roy Morgan.

In fact, more than half a million more households are at risk of mortgage stress after a year of interest rate increases.

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The number of Australians ‘at risk’ of mortgage stress increased by 529,000 over the past year as the RBA increased interest rates at 11 of the past 12 monthly meetings.

The number of mortgage holders considered ‘extremely at risk’ increased to 881,000 (18.5 per cent) in the three months to April 2023.

Mortgage stress to climb even higher

Mortgage risk is set to increase to more than 1.45 million people if the RBA continues to hike interest rates a further two times.

Roy Morgan CEO Michele Levine said mortgage stress increased again in April as the RBA’s interest rate increases from earlier in the year started to flow through.

“Of even more concern is the rise in mortgage holders considered ‘extremely at risk’, now estimated at 881,000 in April 2023 – the highest for over a decade, since October 2011,” Levine said.

“The latest figures show rising interest rates are causing a large increase in the number of mortgage holders considered ‘at risk’, and further increases will spike these numbers even further. If there is a sharp rise in unemployment, mortgage stress is set to rise towards the record high of 35.6 per cent of mortgage holders considered ‘at risk’ in May 2008 during the Global Financial Crisis.”

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