Roy Morgan Research
February 26, 2024

Mortgage stress increased in January following RBA’s November rate rise to record high above 1.6 million

Topic: Press Release
Finding No: 9459
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New research from Roy Morgan shows 1,609,000 mortgage holders (31.0%) were ‘At Risk’ of ‘mortgage stress’ in the three months to January 2024. This period included an interest rate increase on Melbourne Cup Day with the RBA raising interest rates by +0.25% to 4.35%.

The figure for January represented a new record high total for mortgage holders considered ‘At  Risk’ of mortgage stress, beating the previous record highs above 1.56 million in August and September 2023.

The proportion of mortgage holders ‘At Risk’ (31.0%) is well below the record high reached during the Global Financial Crisis 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.

802,000 more ‘At Risk’ of mortgage stress after 18 months of interest rate increases

The number of Australians ‘At Risk’ of mortgage stress has increased by 802,000 since May 2022 when the RBA began a cycle of interest rate increases. Official interest rates are now at 4.35%, the highest interest rates have been since December 2011, over a decade ago.

The number of mortgage holders considered ‘Extremely At Risk’, is now numbered at 994,000 (19.8% of mortgage holders) which is significantly above the long-term average over the last 10 years of 14.3%.

Mortgage Stress – % of Owner-Occupied Mortgage-Holders

Source: Roy Morgan Single Source (Australia), average interviews per 3 month period April 2007 – January 2024, n=2,777. Base: Australians 14+ with owner occupied home loan.

Mortgages ‘At Risk’ set to increase to 1.64 million if RBA raises rates by +0.25% in March 2024

Roy Morgan has modelled the impact of a potential RBA interest rate increases of +0.25% in March 2024 (+0.25% to 4.6%).

In January, 31.0% of mortgage holders, 1,609,000, were considered ‘At Risk’. If the RBA raises interest rates by +0.25% in March to 4.6%, there will be 31.3% (up 0.3% points) of mortgage holders, 1,625,000, considered ‘At Risk’ in March 2024 – an increase of 16,000 on January 2024.

This number will increase further to 31.6% (up 0.6% points) of mortgage holders, 1,638,000, considered ‘At Risk’ in April 2024 – an increase of 29,000 on January 2024.

Mortgage Risk projected forward following an interest rate increase in March 2024

Source: Roy Morgan Single Source (Australia), November 2023 – January 2024, n=3,564. 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 key factor which has the largest impact on income and mortgage stress

It is worth understanding that this is a conservative forecasting model, essentially assuming all other factors remain the same.

The latest Roy Morgan unemployment estimates for January show almost one-in-five Australian workers are either unemployed or under-employed – 3,000,000 (19.3% of the workforce); (Australian unemployment virtually unchanged in January but overall unemployment and under-employment at 3 million (19.3% of workforce)) – an increase of 255,000 (+0.9% points) on a year ago.

While all eyes are on the latest inflation figures and their potential influence on future movements in interest rates, the fact remains that 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 in both December and January as the impact of the RBA’s interest rate increase in November flowed through and reached a new record high above 1.6 million mortgage holders considered ‘At Risk’ for the first time:

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“The latest Roy Morgan data shows 1,609,000 mortgage holders were ‘At Risk’ of mortgage stress in January 2024, up 82,000 from December and up 119,000 since November when the RBA raised interest rates to a 12 year high of 4.35%.

“The latest figures for January 2024 represent an increase of 8,020,000 mortgage holders considered ‘At Risk’ since the RBA began raising interest rates in May 2022. The figures take into account 13 interest rate increases which raised interest rates by a total of 4.25% points to 4.35%.

“The extended pause in official interest rate increases for four months from July – October 2023 reduced the pressure on mortgage holders and allowed growth in several areas of the economy to ‘catch up’ and reduce mortgage stress from the mid-year highs above 1.56 million. However, the interest rate increase in November has added renewed pressure on mortgage holders.

“The latest ABS monthly inflation figures for December 2023 showed a sharp decline in the indicator to 3.4% – down 0.9% points from a month earlier and down a large 5% points from a year earlier. This is the lowest annual inflation in Australia for over two years since November 2021 (3.2%).

“Although inflation pressures are clearly easing, the level of inflation remains above the Reserve Bank’s preferred target range of 2-3% and in inflation indicators such as petrol prices remain high. For the first time in history average retail petrol prices have been above $1.80 per litre for a record 32 straight weeks – equivalent to eight months.

“For these reasons we have modelled a further interest rate increase of +0.25% in March 2024. If the RBA does raise interest rates by 0.25% in March, Roy Morgan forecasts mortgage stress would increase to 1.64 million mortgage holders (31.6%) considered ‘At Risk’ by April. This would represent a new record high number of mortgage holders considered ‘At Risk’ for mortgage stress.

“The latest figures for January show that 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’ of mortgage stress.

“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 employment market in Australia has been exceptionally strong over the last year and this has underpinned rising household incomes which have played a part in reducing overall mortgage stress in January.

“However, rising interest rates since May 2022 have caused a large increase in the number of mortgage holders considered ‘At Risk’. If there is a reacceleration in inflation over the months ahead, that results in further interest rate increases in 2024, levels of mortgage stress are set to increase further to new record highs.”

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

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.

[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 (25% to 45% depending on income and spending) 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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