The number of mortgage holders facing extreme repayment stress has surged to 1.06 million, with the burden falling most heavily on households earning less than $100,000 a year and those at the lower end of the socio-economic spectrum, according to Roy Morgan.
The analysis, drawn from its annual survey of more than 60,000 Australians, found that 19.8% of owner-occupier borrowers were ‘at extreme risk’ in the six months to June, up from 16.7% in December 2025, and the figure categorised as ‘at risk’ also rose from 25.2% to 28.5% over the same period, equating to 1.53 million households.
Roy Morgan’s assessment of who is “at risk” of mortgage stress is based on borrowers who have to pay between 25% and 45% of their after-tax income on home loan repayments.
Those deemed “at extreme risk” would struggle to meet mortgage repayments even if they refinanced their loan over the maximum available term and would be unlikely to qualify for further lending.
“The rise in mortgage stress was underpinned by a combination of rising home loan interest rates and rising inflation, and the volatile impact of the Iran War,” Michele Levine, chief executive at Roy Morgan, said.
“This renewed spike in mortgage stress follows a period of declining mortgages stress between June 2024, and December 2025 driven by a combination of tax relief, real wage growth, and falling home loan interest rates.”
Levine said the surge was particularly concerning for Australians in the two lowest socio-economic quintiles, representing 40% of the population, as they experienced no relief when mortgage stress eased across the broader mortgage market between June 2024 and December 2025.
“During that 18-month period during which the Stage 3 income tax cuts provided taxpayers with extra cash, and the RBA cut interest rates three times during 2025 (from 4.35% to 3.6%), mortgage stress only declined among the three upper socio-economic quintiles (60% of Australians),” she said.
“These are important factors for the Reserve Bank to consider when it decides next week whether to increase interest rates again, although the latest official ABS inflation figures show CPI dropping to 3.8% in the 12 months to June 2026.”