Mortgage stress at highest point in 15 years, research finds
More Australians are at risk of mortgage stress than any time in the past 15 years, new data suggests.
Researchers at Roy Morgan found that an estimated 1.43 million mortgage holders - about 28.8 per cent of them - were in the "at risk" category in the three months to May 2023.
These months included two interest rate rises from the Reserve Bank that led to a 3.85 per cent cash rate in May.
READ MORE: Customer closes account after shock call from bank teller
Mortgage stress is at its highest level in 15 years. Getty Images/iStockphoto
It's the highest number of "at risk" mortgage holders since that number reached almost 1.46 million in May 2008.
The total increased by 627,000 during the past year, alongside 12 monthly rate rises.
Official interest rates before the RBA's decision this afternoon are now at 4.1 per cent, the highest official interest rates since May 2012.
The number of mortgage holders considered "extremely at risk" has also risen - to 19.3 per cent (922,000) in the three months to May 2023.
That's compared to the long-term average of 15.9 per cent during the past 15 years.
Roy Morgan's modelling showed that further interest rate rises today and in August, culminating in a 4.6 per cent cash rate, would further increase the pain felt by homeowners.
Mortgage holders are considered "at risk" by the researcher if their repayments are higher than a certain percentage of household income.
They're considered "extremely at risk" if the interest on their loan is over a certain proportion of household income.
"When considering the data on mortgage stress it is always important to appreciate interest rates are only one of the variables that determines whether a mortgage holder is considered 'at risk'," Roy Morgan CEO Michele Levine said.
READ MORE: Skeletal remains found in torched car in Sydney's south
"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.
"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 increase towards the record high of 35.6 per cent of mortgage holders considered 'at risk' in May 2008 during the Global Financial Crisis."
Sign up here to receive our daily newsletters and breaking news alerts, sent straight to your inbox.
Share a tip-off, video or photo with us
