Roy Morgan Research
February 28, 2023

‘Mortgage stress’ increases to its highest since April 2012 with 24.9% of mortgage holders now ‘At Risk’

Topic: Press Release, Special Poll
Finding No: 9178
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New research from Roy Morgan shows an estimated 1.19 million mortgage holders (24.9%) were ‘At Risk’ of ‘mortgage stress’ in the three months to January 2023. This period encompassed two interest rate increases of 0.25% taking official interest rates to 3.1% in early December.

The proportion of mortgage holders now considered ‘At Risk’ of mortgage stress in the three months to January 2023 (24.9%) is the highest for over a decade since June 2012 and is now significantly above the long-term average of 22.8% stretching back to early 2007.

The number of Australians ‘At Risk’ of mortgage stress has increased by 486,000 over the last year as the RBA increased interest rates for nine consecutive monthly meetings. Official interest rates are now at 3.35% in February 2023, the highest official interest rates since October 2012 over a decade ago.

However, despite the sharp increase in the level of mortgage stress during the last year the overall number remains well below the high reached during the Global Financial Crisis in early 2009 of 35.6% (1,455,000 mortgage holders).

The number of mortgage holders considered ‘Extremely At Risk’, has now increased to 710,000 (15.4%) in the three months to January 2023 which is now slightly above the long-term average over the last 15 years of 659,000 (15.9%).

Mortgage Stress – Owner-Occupied Mortgage-Holders

Source: Roy Morgan Single Source (Australia), average interviews per 3 month period April 2007 – January 2023, n=2,719. Base: Australians 14+ with owner occupied home loan.


Mortgage Risk set to increase to record high above 1.45 million mortgage holders by April 2023

Official RBA interest rates are now at a decade high of 3.35% and widely expected to keep increasing over the next two months following the highest inflation figures for over 30 years in December 2022 (7.8%).

Roy Morgan has modelled the impact of two potential RBA interest rate increases of +0.25% in each of the next two months of March (+0.25% to 3.6%) and April (+0.25% to 3.85%).

In January 24.9% of mortgage holders, 1,185,000, were considered ‘At Risk’ and with expected future interest rate increases to come this is set to increase to over 1-in-4 mortgage holders by April 2023.

If the RBA raises interest rates by +0.25% in March to 3.6% there will be 27.8% (up 2.9% points) of mortgage holders, 1,372,000, considered ‘At Risk’ in March 2023 – an increase of 187,000.

If the RBA raises interest rates by a further +0.25% in April to 3.85% there will be 29.5% (up 4.6% points) of mortgage holders, 1,456,000, considered ‘At Risk’ in April 2023– an increase of 271,000.

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 jumps to 10.7% in January – highest since JobKeeper ended in March 2021 – February 14, 2023).

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.

Mortgage Risk at different level of interest rate increases

Source: Roy Morgan Single Source (Australia), Nov. 2022 – Jan. 2023, n=3,308. 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.

Michele Levine, CEO Roy Morgan, says mortgage stress has increased to its highest in over a decade in January and is set to rise even higher over the next few months if the RBA continues to lift interest rates in both March and April as expected:

“The latest Roy Morgan data shows mortgage stress in the Australian housing market has continued to increase with 1.19 million mortgage holders (24.9%) defined as ‘At Risk’ in January 2023, up 486,000 (+7.6% points) on a year ago before the RBA began hiking interest rates.

“The figures for January 2023 take into account the first eight of the RBA’s interest rate increases which lifted official interest rates from 0.1% in May last year to 3.1% in January. Since then, the RBA has increased interest rates once more, up +0.25% to 3.35% - the highest level of official interest rates for over a decade since October 2012.

“The latest ABS CPI figures for the year to December 2022 released in late January show Australian inflation hitting a 33 year high of 7.8% - the highest since March 1990 (7.8%). The high, and rising, inflation level prompted the RBA to raise interest rates for a ninth consecutive meeting in February and is set to lead to further interest rates increases in both March (+0.25%) and April (+0.25%).

“If the RBA does raise interest rates again in the next two months by a total of 0.5% Roy Morgan forecasts that mortgage stress is set to increase to over 1.45 million mortgage holders considered ‘At Risk’ by April 2023 – 29.5% of all mortgage holders, the highest since September 2011.

“Of more concern is the rise in mortgage holders considered ‘Extremely At Risk’, now estimated at 710,000 (15.4%) in January 2023 – the highest since October 2016 (15.8%). The number of mortgage holders considered ‘Extremely At Risk’ in January 2023 remains below the long-term average of 15.9% since mid-2007.

“When considering these figures on mortgage stress it is always important to take into account that 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 interest rates are approaching levels that will cause a significant spike in the number of mortgage holders considered ‘At Risk’ over the next few months. If there is a sharp rise in unemployment during his period mortgage stress will rise precipitously towards the highest levels experienced during the Global Financial Crisis in 2007-08-09. At that time a peak of 35.6% of mortgage holders were considered ‘At Risk’ in May 2008.

“The latest Roy Morgan employment estimates show a near-record 13.4 million Australians were employed in January 2023, up by over 500,000 since February 2020 when there were 12.9 million employed pre-pandemic. The strong growth in the jobs market has attracted more Australians into the labour force and there are now over 1.6 million unemployed Australians (10.7% of the workforce) compared to 1.17 million pre-pandemic.”

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.


[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.



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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