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.

Mortgage stress graph.jpg

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.

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.
$2,408
Principal & Interest
Variable
$0
$530
70%
Featured Online ExclusiveUp To $4K Cashback
  • Immediate cashback upon settlement
  • $2,000 for loans up to $700,000
  • $4,000 for loans over $700,000
5.99% p.a.
5.90% p.a.
$2,396
Principal & Interest
Variable
$0
$0
80%
Featured Apply In Minutes
  • No application or ongoing fees. Annual rate discount
  • Unlimited redraws & additional repayments. LVR <80%
  • A low-rate variable home loan from a 100% online lender. Backed by the Commonwealth Bank.
6.14% p.a.
6.16% p.a.
$2,434
Principal & Interest
Variable
$0
$250
60%
Featured Unlimited Redraws
  • No annual fees - None!
  • Get fast pre-approval
  • Unlimited additional repayments free of charge
  • Redraw freely - Access your additional payments when you need them
  • Home loan specialists available today
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.


Image by Konstantin Evdokimov via Unsplash.





Ready, Set, Buy!


Learn everything you need to know about buying property – from choosing the right property and home loan, to the purchasing process, tips to save money and more!

With bonus Q&A sheet and Crossword!

By subscribing you agree to our privacy policy