Mortgage stress surges at triple last year's pace as regional borrowers feel the pinch

The number of Australian mortgages showing signs of financial stress is growing more than three times faster than a year ago, according to new data from Experian.

Experian's figures show home loan accounts under strain increased 7.3% in the first half of 2026, up from 2.3% a year earlier, with regional borrowers facing the greatest pressure.

The findings, released ahead of the busiest part of the spring selling season, suggest financial pressure remains elevated despite a housing market that continues to attract buyers and sellers.

Experian's latest Housing Pressure Report found more than half of Australians (55%) say their rent or mortgage places a fair amount or great deal of pressure on household finances.

Regional Australia feeling the strain

While the national figures point to growing mortgage stress, the pressure is far from evenly distributed.

Regional home loan accounts were 10.5% more likely than the national average to show signs of repayment strain, while capital-city borrowers were 3.5% less likely to be under pressure.

Greater Melbourne and regional Victoria recorded the highest levels of mortgage stress among the locations analysed, highlighting the uneven impact of higher borrowing costs across the country.

Barrett Hasseldine, Experian Australia and New Zealand's head of data science, said national averages can hide significant differences between borrowers.

"Housing pressure isn't showing up evenly across Australia; national averages can mask important differences between locations, life stages and borrower groups," he said.

The strongest signal from the data is that Australians reporting the greatest repayment pressure from rate rises are often the same groups showing deteriorating credit performance.

Gen X and older millennials feeling the mortgage crunch

Mortgage stress is rising fastest among Australians aged 35 to 54, according to Experian.

Borrowers aged 35 to 44 recorded an 11.8% increase in repayment strain in the first half of 2026, while those aged 45 to 54 were 13.6% more likely than the national average to show signs of stress.

Overall, 1.8% of home loan accounts were under strain in June, measured through indicators including arrears, hardship arrangements and loan variations.

The credit data aligns with consumer sentiment. Nearly half of borrowers aged 35 to 44 (47.5%) and 45 to 54 (45.5%) whose repayments had changed blamed interest rates, compared with 34.5% of Australians overall.

Higher costs weigh on buyers and household finances

Affordability pressures appear to be cooling demand, with 18.5% of Australians delaying plans to buy a home over the past year.

The caution is showing up in lending data. New home loan account openings fell 10.5% year-on-year in July, while new borrowers carried a predicted default risk 12.9% lower than those entering the market a year earlier.

This suggests lenders are writing fewer, but lower-risk, home loans.

At the same time, mortgage holders are grappling with broader cost-of-living pressures. More Australians identified grocery bills (55.4%) as a major household strain than mortgage or rent repayments (45.4%).

Financial buffers also appear limited. More than one in five Australians (20.9%) said they regularly or sometimes rely on savings or credit to get through a typical month, while 42.4% said they could not absorb another 10% increase in repayments without cutting essentials or taking on more debt.

The findings draw on Experian's credit and spending data, alongside a national survey of Australians, to build a broader picture of housing pressure across the country.