Roy Morgan Research
July 03, 2023

‘Mortgage stress’ increases to its highest since May 2008 with 28.8% of mortgage holders now ‘At Risk’

Topic: Press Release
Finding No: 9269
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New research from Roy Morgan shows an estimated 1.43 million (28.8%) mortgage holders were ‘At Risk’ of ‘mortgage stress’ in the three months to May 2023. This period encompassed two interest rate increases of 0.25% taking official interest rates to 3.85% in May.

This is the highest number of mortgage holders considered ‘At Risk’ since there were 1.46 million ‘At Risk’ in May 2008. The proportion of mortgage holders considered ‘At Risk’ of mortgage stress in the three months to May 2023 (28.8%) is the highest for fifteen years since September 2011 (29.6%).

Over 600,000 more household at risk of mortgage stress after a year of interest rate increases

The number of Australians ‘At Risk’ of mortgage stress has increased by 627,000 over the last year as the RBA increased interest rates at twelve of the last thirteen-monthly meetings. Official interest rates are now at 4.1% in June 2023, the highest official interest rates since May 2012 over a decade ago.

Despite the sharp increase in the level of mortgage stress during the last year it remains below the high reached during the Global Financial Crisis in early 2008 of 35.6% (1,455,000 mortgage holders) – although this level is set to be reached with further interest rate increases.

The number of mortgage holders considered ‘Extremely At Risk’, has now increased to 922,000 (19.3%) in the three months to May 2023 which is now significantly above the long-term average over the last 15 years of 15.9%.

Mortgage Stress – Owner-Occupied Mortgage-Holders

Source: Roy Morgan Single Source (Australia), average interviews per 3 month period April 2007 – May 2023, n=2,738.
Base: Australians 14+ with owner occupied home loan.

Mortgage Risk set to increase to over 1.45 million if RBA raises rates by +0.25% in July

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

In May 28.8% of mortgage holders, 1,434,000, were considered ‘At Risk’ and this would increase to almost 30% of mortgage holders by August 2023 if these two increases occurred.

If the RBA raises interest rates by +0.25% in July to 4.35% there will be 29.0% (up 0.2% points) of mortgage holders, 1,485,000, considered ‘At Risk’ in July 2023 – an increase of 51,000.

If the RBA raises interest rates by a further +0.25% in August to 4.6% there will be 29.9% (up 1.1% points) of mortgage holders, 1,528,000, considered ‘At Risk’ in August 2023 – an increase of 94,000.

Mortgage Risk at different level of interest rate increases in July & August 2023

Source: Roy Morgan Single Source (Australia), Mar – May. 2023, n=3,621. 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.

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. And of course we are already seeing an increase in unemployment (Australian unemployment increases to 10.3% in June – the highest since January 2023 – June 30, 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 again in May as the RBA’s interest rate increases early in 2023 flowed through to the wider mortgage market with 1.43 million mortgage holders now considered ‘At Risk’ of mortgage stress – the highest since 2008:

Block Quote

“The latest Roy Morgan data shows mortgage stress in the Australian housing market has continued to increase with 1.43 million mortgage holders (28.8%) defined as ‘At Risk’ in May 2023, up 627,000 (+11.5% points) on a year ago before the RBA began a record-breaking series of interest rate rises.

“The figures for May 2023 take into account eleven RBA interest rate increases which lifted official interest rates from 0.1% in May last year to 3.85% by May. Since then, the RBA has subsequently increased interest rates again in the first week of June to 4.1%.

“The ABS monthly CPI figures for the year to May 2023 show Australian inflation dropping to 5.6%, down from 6.8% in the year to April 2023. This drop in CPI follows the ANZ-Roy Morgan Inflation Expectations – which also fell in May. However, this monthly decline proved to be short-lived with Inflation Expectations increasing substantially during the next four weeks in June.

“The decline in the ABS monthly CPI figures has some analysts suggesting the RBA will not increase interest rates next week. However, the latest ABS Retail Sales figures for May released this week show a monthly increase of 0.7% – the strongest monthly result for four months since January 2023.

“These somewhat contradictory figures provide justifications for the RBA to either increase interest rates or leave rates unchanged – depending upon which factors they consider more significant. It is worth noting that the underlying ABS CPI figure for May (after removing volatile items such as fruit, vegetables, automotive fuel and holiday travel) was 6.4%, down only slightly from April (6.5%).

“If the RBA does raise interest rates again next week by 0.25% Roy Morgan forecasts mortgage stress is set to increase to over 1.48 million mortgage holders (29.0%) considered ‘At Risk’ by July 2023.

“Of even more concern is the rise in mortgage holders considered ‘Extremely At Risk’, now estimated at 922,000 (19.3%) in May 2023 – the highest for over a decade since November 2011 (20.8%). This is an increase of over 440,000 mortgage holders from a year ago (+8.5% 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 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% of mortgage holders considered ‘At Risk’ in May 2008 during the Global Financial Crisis.”

[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.

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

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About Roy Morgan

Roy Morgan is Australia’s largest independent Australian research company, with offices in each state, as well as in the U.S. and U.K. A full-service research organisation, Roy Morgan has over 80 years’ experience collecting objective, independent information on consumers.

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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