Mortgage stress has climbed to its highest level in 18 years, with 32.5% of Australian mortgage holders now considered at risk. Here's what the data means if you're planning to buy your first home.
Roy Morgan's mortgage stress index has climbed to its highest level in 18 years, with an estimated 32.5% of Australian mortgage holders, around 1.79 million people, now considered "at risk" of mortgage stress. That is up 2.2 percentage points in a single month, and it matters for anyone still saving a deposit, because it is a preview of what today's rates look like for the people already holding a loan.
Roy Morgan classes a borrower as "at risk" of mortgage stress when their repayments make up more than a set share of household income, adjusted for the household's specific mortgage and income profile. The current reading is the highest the research has recorded since 2008, when official interest rates were near a 30-year high. The rise has followed a series of Reserve Bank rate increases through 2026, alongside softer conditions in the labour market.
The increase has not been even across the population. Roy Morgan's data shows the fastest growth in stress among lower income households and lower socio-economic groups, who typically have smaller buffers to absorb higher repayments. That pattern is worth keeping in mind if you are budgeting for a first home loan: the headline average can look manageable while a thinner-buffer household on the same income sits much closer to the edge.
It's tempting to read mortgage stress data as a story about other people's loans. But the repayment pressure showing up in this data is calculated at today's rates, on loans that were mostly approved under the more generous serviceability settings of a year or two ago. A new loan taken out now already reflects current rates, and your lender will assess your application against a buffer well above the rate you'd actually pay, precisely so you have some room if rates move again.
None of this is a reason to panic, and it isn't a signal that buying now is the wrong move. It is a reason to be deliberate about the loan size and buffer you choose, rather than borrowing up to the maximum a lender is willing to approve. A few practical steps can help:
Your lender will run its own serviceability assessment, and a mortgage broker or financial adviser can help you think through buffer and budgeting decisions in the context of your own situation. This article looks at the general trend, not personal advice.
These tools can help you see how a rate change would affect your own repayments, based on the assumptions you enter: