Roy Morgan Research
August 28, 2023

A record high 1.5 million Australians are now ‘At Risk’ of ‘mortgage stress’ representing 29.2% of mortgage holders

Topic: Press Release
Finding No: 9309

New research from Roy Morgan shows a record high 1.5 million (29.2%) mortgage holders were ‘At Risk’ of ‘mortgage stress’ in the three months to July 2023. This period encompassed two interest rate increases of 0.25% taking official interest rates to 4.1% in June.

The figures for July represent a new record high and surpass the previous record high number reached in the three months to May 2008 of 1.46 million.

Over 640,000 more households at risk of mortgage stress after a year of interest rate increases

The number of Australians ‘At Risk’ of mortgage stress has increased by 642,000 over the last year as the RBA increased interest rates at twelve of the last fifteen-monthly meetings. Official interest rates are now at 4.1% in August 2023, the highest official interest rates since May 2012 over a decade ago.

Although the number of Australians at risk of mortgage stress (1,496,000) is at a record high the proportion of 29.2% remains below the record highs reached during the Global Financial Crisis of 10-15 years ago because of the larger size of the Australian mortgage market today. The record high of 35.6% of mortgage holders in mortgage stress was reached in mid-2008.

The number of mortgage holders considered ‘Extremely At Risk’, has now increased to 1,017,000 (20.3%) which is now significantly above the long-term average over the last 15 years of 15.4%.

Mortgage Stress – Owner-Occupied Mortgage-Holders

Source: Roy Morgan Single Source (Australia), average interviews per 3 month period April 2007 – July 2023, n=2,748.
Base: Australians 14+ with owner occupied home loan

Mortgage Risk set to increase to over 1.57 million if RBA raises rates by +0.25% in September

Roy Morgan has modelled the impact of two potential RBA interest rate increases of +0.25% in both September (+0.25% to 4.35%) and October (+0.25% to 4.6%).

In July 29.2% of mortgage holders, 1,496,000, were considered ‘At Risk’ and this would increase to over 30% of mortgage holders by September 2023 if the RBA increases interest rates next month.

If the RBA raises interest rates by +0.25% in September to 4.35% there will be 30.2% (up 1% point) of mortgage holders, 1,577,000, considered ‘At Risk’ in September 2023 – an increase of 81,000.

If the RBA raises interest rates by a further +0.25% in October to 4.6% there will be 30.7% (up 1.5% points) of mortgage holders, 1,604,000, considered ‘At Risk’ in October 2023 – an increase of 108,000.

Mortgage Risk at different level of interest rate increases in September & October 2023

Source: Roy Morgan Single Source (Australia), May – July 2023, n=3,774. Base: Australians 14+ with owner occupied home loan.

How are mortgage holders considered ‘At Risk’ or ‘Extremely At Risk’ determined?

Roy Morgan considers the risk of ‘mortgage stress’ among Mortgage holders in two ways:

Mortgage holders are considered ‘At Risk’[1] if their mortgage repayments are greater than a certain percentage of household income – depending on income and spending.

Mortgage holders are considered ‘Extremely at Risk’[2] if even the ‘interest only’ is over a certain proportion of household income.


[1] "At Risk" is based on those paying more than a certain proportion of their after-tax household income (25% to 45% depending on income and spending) into their home loan, based on the appropriate Standard Variable Rate reported by the RBA and the amount they initially borrowed.

[2] "Extremely at Risk" is also based on those paying more than a certain proportion of their after-tax household income into their home loan, based on the Standard Variable Rate set by the RBA and the amount now outstanding on their home loan.

Unemployment is the factor which has the largest impact on income and mortgage stress

It is worth understanding that this is a conservative model, essentially assuming all other factors remain the same. Roy Morgan’s latest unemployment estimates show a monthly decline but almost one-in-five Australian workers are either unemployed or under-employed – 2,815,000 (18.6% of the workforce): (Australian unemployment drops to 9.1% in July, but under-employment increases to 9.5%; under-employment is highest for Australians aged under 25 – August 4, 2023).

While all eyes are on interest rates the greatest impact on an individual, or household’s, ability to pay their mortgage is not interest rates, it’s if they lose their job or main source of income.

Michele Levine, CEO Roy Morgan, says mortgage stress increased to a new record high in July with 1.5 million mortgage holders considered ‘At Risk’ of mortgage stress as the RBA’s interest rate increases early in 2023 flowed through to the wider mortgage market:

Block Quote

“The latest Roy Morgan data shows mortgage stress in the Australian housing market has increased to a new record high with 1.5 million mortgage holders (29.2%) defined as ‘At Risk’ in July 2023. This represents a substantial increase of 642,000 (+9.8% points) on a year ago just after the RBA began a record-breaking series of interest rate increases.

“The figures for July 2023 take into account all twelve RBA interest rate increases which lifted official interest rates from 0.1% in May last year to 4.1% by June 2023. Since then, the RBA has decided to leave interest rates unchanged at its two most recent meetings in July and August.

“The ABS CPI figures for the year to June 2023 show Australian inflation dropping to 6.0%, down from 7.0% in the year to March 2023 and a cycle high of 7.8% in the year to December 2022. The decline in CPI so far in 2023 has led many to suggest the RBA may have completed its cycle of interest rate increases after raising rates in June.

“However, although the drop in the quarterly CPI figure is welcome, there are new inflationary pressures building in the economy. During mid-August the average retail petrol price in Australia increased to over $2 per litre for the first time since July 2022 – over a year ago.

“On two occasions during 2022 average retail petrol prices increased to over $2 per litre – in March 2022 and July 2022. On both occasions after petrol prices soared Inflation Expectations also increased rapidly – up from 4.7% to 6.4% in March 2022 and up from 5.1% to 6.0% in July 2022. The latest ANZ-Roy Morgan Inflation Expectations for the week to August 20 may have shown the first inkling of rising petrol prices as the weekly measure increased by 0.3% points to 5.5%.

“The increases to petrol prices are being driven by a decline in the value of the Australian Dollar which has now dropped below 65 US cents to its lowest for nearly a year since November 2022. As long as the Australian Dollar stays low and petrol prices stay high, and even increase further, there will be additional inflationary pressures in the economy.

“Therefore, although many have suggested the RBA has finished its cycle of interest rate increases, the low Australian Dollar and high petrol and energy prices adding to inflation may force their hand for further interest rate increases in the months ahead.

“These possibilities are a key factor in why we have modelled two further interest rate increases in September and October. “If the RBA does raise interest rates again next week by 0.25% Roy Morgan forecasts mortgage stress is set to increase to over 1.57 million mortgage holders (30.2%) considered ‘At Risk’ by September 2023.

“Of even more concern is the rise in mortgage holders considered ‘Extremely At Risk’, now estimated at 1,017,000 (20.3%) in July 2023 – the highest for over 15 years since July 2008 (26.2%). This is an increase of over 470,000 mortgage holders from a year ago (+7.6% points).

“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’. 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 on mortgage stress show that 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% of mortgage holders considered ‘At Risk’ in May 2008 during the GFC.”

These are the latest findings from Roy Morgan’s Single Source Survey, based on in-depth interviews conducted with over 60,000 Australians each year including over 10,000 owner-occupied mortgage-holders.

To understand more about mortgages in the full context of household finances and the uncertainties caused by the COVID-19 coronavirus and rising interest rates and inflation, ask Roy Morgan.

To learn more about Roy Morgan’s mortgage data, call (+61) (3) 9224 5309 or email askroymorgan@roymorgan.com.

Please click on this link to the Roy Morgan Online Store.

Margin of Error

The margin of error to be allowed for in any estimate depends mainly on the number of interviews on which it is based. Margin of error gives indications of the likely range within which estimates would be 95% likely to fall, expressed as the number of percentage points above or below the actual estimate. Allowance for design effects (such as stratification and weighting) should be made as appropriate.

Sample Size Percentage Estimate
40% – 60% 25% or 75% 10% or 90% 5% or 95%
1,000 ±3.0 ±2.7 ±1.9 ±1.3
5,000 ±1.4 ±1.2 ±0.8 ±0.6
7,500 ±1.1 ±1.0 ±0.7 ±0.5
10,000 ±1.0 ±0.9 ±0.6 ±0.4
20,000 ±0.7 ±0.6 ±0.4 ±0.3
50,000 ±0.4 ±0.4 ±0.3 ±0.2
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