Household debt has been a big talking point, with strong house price rises through the year, and household wealth hitting a new record high.

On the flipside however, debt per capita rose to around $102,000.

Figures would be closer to $130,000 if under-18s were not included in the results, who legally cannot take on debt in a lot of circumstances.

CommBank chief Matt Comyn said the bank was "increasingly concerned" about mortgage stress.

"We are not concerned about where we are now but, given the rate of growth in credit versus the outlook for growth in income, it would be better to act sooner rather than later," Mr Comyn said.

ANZ chief Shayne Elliott echoed similar.

"We have one million home loan customers and the book is in good shape. But there are some emerging signs of stress. It is always time for caution when you see the price rises we have seen," Mr Elliott said.

The commentary comes after prudential regulator data revealed home loans with debt-to-income ratios above six accounted for more than a fifth of all home loans written in the June 2021 quarter.

This was a 5.9 percentage point climb over June 2020 quarter's results.

So, what does this mean for Australians?

Drew Haupt, co-founder of non-bank lender WLTH, said regulators will have to keep an eye out for deteriorating lending standards.

"More and more Australians are taking on debt with lower levels of income but this is balanced by a number of different metrics moving in a more positive direction," Mr Haupt said.

"Borrowers should do their part and be responsible with their loan ... Maintain an emergency fund to cover a few months of all expenses.

"Point is, we shouldn't be scared about taking action - we should be scared of doing nothing when we can."

How are the banks addressing this?

In June, CommBank increased its serviceability buffer from 5.1% to 5.25%.

These are calculations based on a borrower and how a 5.25% home loan would fit into their budget, despite home loan rates being much lower than this.

Until recently, such calculations were usually based on interest rates of 7% or more.

On Thursday Mr Elliott said ANZ was taking more time to assess home loan applications, which could take as long as 32 days.


Buying a home or looking to refinance? The table below features home loans with some of the lowest interest rates on the market for owner occupiers.

Update resultsUpdate
LenderHome LoanInterest Rate Comparison Rate* Monthly Repayment Repayment type Rate Type Offset Redraw Ongoing Fees Upfront Fees LVR Lump Sum Repayment Additional Repayments Split Loan Option TagsFeaturesLinkCompare
6.04% p.a.
6.06% p.a.
Principal & Interest
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5.99% p.a.
5.90% p.a.
Principal & Interest
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6.14% p.a.
6.16% p.a.
Principal & Interest
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Important Information and Comparison Rate Warning

Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to be made on variables as selected and input by the user. Some products will be marked as promoted, featured or sponsored and may appear prominently in the tables regardless of their attributes. All products will list the LVR with the product and rate which are clearly published on the product provider’s website. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of . View disclaimer.

Photo by Luis Villasmil on Unsplash

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