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.

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LenderHome LoanInterest Rate Comparison Rate* Monthly Repayment Repayment type Rate Type Offset Redraw Ongoing Fees Upfront Fees Max LVR Lump Sum Repayment Extra Repayments Split Loan Option TagsFeaturesLinkComparePromoted ProductDisclosure
5.54% p.a.
5.58% p.a.
$2,852
Principal & Interest
Variable
$0
$530
90%
  • Owner Occupier
  • Variable
  • Principal & Interest
  • 10% Min Deposit
  • Redraw
  • Extra Repayments
  • More details
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Disclosure
5.49% p.a.
5.40% p.a.
$2,836
Principal & Interest
Variable
$0
$0
80%
  • Built and funded by CommBank
  • Owner Occupier
  • Variable
  • Principal & Interest
  • 20% Min Deposit
  • Redraw
  • More details
  • 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.
 Disclosure
5.64% p.a.
5.89% p.a.
$2,883
Principal & Interest
Variable
$250
$250
60%
  • 100% offset
  • Owner Occupier
  • Variable
  • Principal & Interest
  • 40% Min Deposit
  • Offset
  • Redraw
  • More details
  • Easy application. Fast approval. 100% offset.
  • Unlimited additional repayments free of charge.
  • Redraw available - Access additional payments.
 Disclosure
5.64% p.a.
5.89% p.a.
$2,883
Principal & Interest
Variable
$248
$350
60%
  • Owner Occupier
  • Variable
  • Principal & Interest
  • 40% Min Deposit
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 Disclosure
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.

Important Information and Comparison Rate Warning
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Image by Konstantin Evdokimov via Unsplash.

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