For the first time on record, fewer than 600,000 mortgage holders were considered 'at risk' of mortgage stress, new research revealed.
According to Roy Morgan research, NSW, VIC and the ACT saw numbers of those 'at risk' of mortgage stress tumble amid lockdowns.
Throughout the three months to September 2021, Roy Morgan noted an estimated 584,000 mortgage holders (15.8%) were at risk of stress.
This is less than half the level it was during the Global Financial Crisis (GFC) in 2008 when it reached a high of 35.6% of mortgage holders.
According to Roy Morgan, this sharp drop was driven by a combination of record low interest rates, government financial aid and support offered by banks and financial institutions.
Roy Morgan Chief Executive Michele Levine said an analysis of economic factors and mortgages stress since before the GFC has shown that while the single biggest driver of mortgage stress is unemployment, interest rates and economic conditions have some impact on mortgage stress.
"The last year or so has seen low interest rates, but the real reason we see such low levels of mortgage stress is the Government support and mortgage deferrals for those mortgage holders who would otherwise have been at risk," Ms Levine said.
“The Federal Government’s ‘COVID-19 Disaster Payments’ have delivered over $11.9 billion to Australians in financial distress since June while APRA’s figures to September 30, 2021 show mortgages to the value of $11.5 billion have been deferred during the recent lockdowns."
Of the mortgage holders considered at risk in the three months to September 2021, Roy Morgan noted almost two-thirds, 357,000 or 10.3% of all mortgage holders, were considered extremely at risk.
This is down from 388,000 or 11.3% mortgage holders extremely at risk a year ago in the three months to September 2020.
Roy Morgan considers the risk of mortgage stress among mortgage holders in two ways:
- Mortgage holders are considered 'at risk' if their mortgage repayments are greater than 25-45% of after-tax household income – depending on income and spending.
- Mortgage holders are considered 'extremely at risk' if even the ‘interest only’ portion of their repayments is over a certain proportion of household income.
Advertisement
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.
Lender | Advertised rate | Comparison rate | Monthly repayment | Rate Type | Offset | Redraw | Ongoing Fee | Upfront Fees | LVR | Lump Sum Repayment | Additional Repayments | Pre-approval | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Variable | More details | ||||||||||||
| FEATUREDLIMITED TIME OFFER | Smart Booster Home Loan Discounted Variable - 2yr (LVR < 80%)
| ||||||||||||
Smart Booster Home Loan Discounted Variable - 2yr (LVR < 80%)
| |||||||||||||
| Variable | More details | ||||||||||||
| FEATURED100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES | Low Rate Home Loan - Prime (Principal and Interest) (Owner Occupied) (LVR < 60%)
| ||||||||||||
Low Rate Home Loan - Prime (Principal and Interest) (Owner Occupied) (LVR < 60%)
| |||||||||||||
| Variable | More details | ||||||||||||
| FEATUREDREFINANCE IN MINUTES, NOT WEEKS | Nano Home Loans Variable Owner Occupied, Principal and Interest (Refinance Only)
| ||||||||||||
Nano Home Loans Variable Owner Occupied, Principal and Interest (Refinance Only)
| |||||||||||||
| Variable | More details | ||||||||||||
| FEATUREDNO UPFRONT OR ONGOING FEES | Owner Occupier Accelerates - Celebrate (LVR < 60%) (Principal and Interest)
| ||||||||||||
Owner Occupier Accelerates - Celebrate (LVR < 60%) (Principal and Interest)
| |||||||||||||
- Fast turnaround times, can meet 30-day settlement
- For purchase and refinance, min 20% deposit
- No ongoing or monthly fees, add offset for 0.10%
Rates correct as of November 27, 2021. View disclaimer.
Image by Konstantin Evdokimov via Unsplash.
