More Than 20% of Australians Experience Mortgage Stress

Wednesday, December 19th, 2018

According to a recent survey from Roy Morgan’s research institute, almost one million Australians have direct experience with mortgage stress. The staggering figure represents around 20% of mortgage holders.

The results of the survey are based on Roy Morgan’s interviews with 10,000 owner-occupier borrowers, and although they do reveal mortgage stress has decreased since this time in 2017, when 21.3% of mortgage holders declared feelings of mortgage stress, it is still worrying to see such a significant number clearly feeling the pinch.

The same new survey shows there has been a decrease in the numbers of mortgage holders who are classified as “extremely at risk” (from 14.9 per cent in 2017, to 13.5 per cent in 2018).

The results from the survey also show that some areas of Australia have a greater incidence of mortgage stress than others, with respondents in Western Australia and Sydney appearing to be more ‘at risk’ than their counterparts in other states and territories.

What is mortgage stress?

It’s a term used to describe the stress resulting from mortgage responsibilities. More specifically, though, the term relates directly to borrowers who pay mortgage repayments that are more than 30% of their household income.

This does not mean that households are suffering badly, necessarily, but it does mean that there is some form of psychological stress attached to taking on large debt. To alleviate the issue, potential borrowers should plan and budget realistically, and shop around for the best possible mortgage deal to suit their long-term property ownership goals.

Why is mortgage stress declining?

As loan accessibility has become tighter, because of restrictions that were enforced by the Australian Prudential Regulation Authority (APRA), as well as findings of the recent Royal Commission into misconduct in the Banking, Superannuation and Financial Services, people who may not have been the best candidates for large mortgages are now being turned down – something that has more positive consequences for everyone involved. On top of that, a gentle slowing of house prices in some of the major Australian cities is leading to mortgage applications that are lower in value.

Of course, mortgage stress will never completely go away for everyone and it is a prudent reminder that taking on any debt should be a decision entered into carefully.


For more information about a loan to suit your own individual circumstances, talk to our loan brokers at Loans Actually today.

Leave a Reply

Your email address will not be published. Required fields are marked *