One in six Australian mortgage holders suffering from ‘mortgage stress’
New research has revealed that a combination of government assistance and record low interest rates has helped cut mortgage stress to ‘near record’ low levels, yet a significant number of Australian homeowners remain under pressure.
Estimates based on Roy Morgan’s latest Single Source Survey show that more than one in six mortgage holders (roughly 677,000 people) were either ‘at risk’ or ‘extremely at risk’ of mortgage stress in the three months to May 2021.
According to Roy Morgan ‘at risk’ mortgage holders have home loan repayments which exceed a certain percentage of household income, while mortgage holders are considered ‘extremely at risk’ if even the interest only is over a certain proportion of household income.
While the new research highlights the ongoing pressure felt by many households, the latest mortgage stress figures are actually at one of the lowest points recorded and they’re noticeably lower than during the early period of the COVID-19 pandemic.
“The latest Roy Morgan data into the Australian housing market shows mortgage stress is near record lows in mid-2021 despite the end of the Federal Government’s $89 billion JobKeeper wage subsidy at the end of March 2021,” said Roy Morgan chief executive, Michele Levine.
“In the three months to May 2021 there were 677,000 mortgage holders considered ‘At Risk’ (17.3% of mortgage holders) and 440,000 considered ‘Extremely at Risk’ (11.8% of mortgage holders).
“Both measures of mortgage stress have dropped during the first half of 2021 as strong employment markets and record low interest rates have combined to support the economy despite the end of the elevated Government financial support.”
Will new lockdowns raise stress levels?
What remains to be seen is the impact the present COVID-related lockdowns in New South Wales, Victoria and most recently, South Australia, will have on levels of mortgage stress.
Currently 13 million people in the three states are in some form of lockdown, with many experiencing reduced working hours or job loss as a result of tightened restrictions.
According to Levine, over two in three mortgages are dependent on more than one income, which means that any form of reduction can heighten the risk of stress.
“Many years of research into mortgage stress has shown that the biggest driver of increased mortgage stress is the reduction in income caused by the loss of a job which causes an immediate jump into a ‘risk’ category,” she said.
However, it’s hoped that economic support from both federal and state governments may, once again, go some way to alleviating mortgage stress.
“The latest outbreaks of COVID-19 in Sydney and Melbourne are causing renewed concern as hundreds of thousands of workers in both cities are forced to stop working as part of the lockdowns across industries such as retail, hospitality, recreation and in Sydney, the construction industry,” said Levine.
“The good news is that one of the lessons of the pandemic, to provide financial support to those forced into financial distress by lockdowns, has been learnt – with both Federal and State Governments increasing the level of new financial support available in both States in the last week.”
RELATED: Property for sale listings continue to decline, says REA
For more information on the bank and government-based assistance available to Australians affected by the pandemic, check out our mega guide on everything you need to know about Coronavirus and your finances.
Compare home loans - last updated 19 March 2024
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Featured Product
Ultra Low Rate <95% LVR
Owner Occupier, Principal & Interest
interest rate
comparison rate
Initial monthly repayment6.30% p.a. variable6.58% p.a.Only 5% deposit required to apply. Low upfront costs to pay. No LMI Required. Unlimited Redraw and additional repayments. No Application or ongoing fees. No guarantors or equity sharing required.
CompareCompareUltra Low Rate <95% LVR
Only 5% deposit required to apply. Low upfront costs to pay. No LMI Required. Unlimited Redraw and additional repayments. No Application or ongoing fees. No guarantors or equity sharing required.
- interest rate
- 6.30% p.a. variable
- comparison rate
- 6.58% p.a.
- interest rate
- 6.30% p.a. variable
- comparison rate
- 6.58% p.a.
- Upfront fees
- $790
- Ongoing fees
- $0.00
- Discharge Fee
- $795.00
- Extra repayments
- yes - free
- Redraw facility
- yes - free
- Offset account
- no
- Maximum loan to value ratio
- 95.00%
- minimum borrowing amount
- $350,000
- maximum borrowing amount
- $2,000,000
- type of mortgage
- Variable
- Repayment types
- Principal & Interest
- Availability
- Owner Occupier
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- Monthly
- Special Offers
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Read our Mozo Review to learn more about the Sucasa Ultra Low Rate <95% LVR
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Mozo experts choice awards won:
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Unloan Variable
Owner Occupier, Refinance Only, LVR <80%
interest rate
comparison rate
Initial monthly repayment5.99% p.a. variable5.90% p.a.For refinancers only. Built by CommBank, the Unloan is the first home loan with an increasing discount (conditions apply) for borrowers. No application or banking fees. No monthly account keeping or early exit fees. Apply in as little as 10 minutes.
CompareCompareUnloan Variable
For refinancers only. Built by CommBank, the Unloan is the first home loan with an increasing discount (conditions apply) for borrowers. No application or banking fees. No monthly account keeping or early exit fees. Apply in as little as 10 minutes.
- interest rate
- 5.99% p.a. variable
- comparison rate
- 5.90% p.a.
- interest rate
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- comparison rate
- 5.90% p.a.
- Upfront fees
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- Ongoing fees
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- Discharge Fee
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- Extra repayments
- yes - free
- Redraw facility
- yes - free
- Offset account
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- Maximum loan to value ratio
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- minimum borrowing amount
- $10,000
- maximum borrowing amount
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- type of mortgage
- Variable
- Repayment types
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- Weekly, Fortnightly, Monthly
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Read our Mozo Review to learn more about the Unloan Unloan Variable
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Straight Up
Obliterate, Owner Occupier, Principal & Interest, <50% LVR
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Initial monthly repayment6.24% p.a. variable6.24% p.a.Get a low variable rate depending on your deposit with Athena’s Straight Up Variable Home Loan. AcceleRATES feature helps you to reduce your home loan even faster (T&Cs apply). Zero fees to pay. Free redraw facility. Handy mobile app to manage your home loan.
CompareCompareStraight Up
Get a low variable rate depending on your deposit with Athena’s Straight Up Variable Home Loan. AcceleRATES feature helps you to reduce your home loan even faster (T&Cs apply). Zero fees to pay. Free redraw facility. Handy mobile app to manage your home loan.
- interest rate
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- comparison rate
- 6.24% p.a.
- interest rate
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- Upfront fees
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- Ongoing fees
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- Discharge Fee
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- Extra repayments
- yes - free
- Redraw facility
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- Offset account
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- Maximum loan to value ratio
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- minimum borrowing amount
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- maximum borrowing amount
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- type of mortgage
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Read our Mozo Review to learn more about the Athena Straight Up
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Neat Home Loan
Owner Occupier, Principal & Interest, LVR <60%
interest rate
comparison rate
Initial monthly repayment6.14% p.a. variable6.16% p.a.Competitively-priced variable rate loan. Ideal for owner occupiers and investors. No service fees to pay. Make free extra repayments and redraws. Flexible repayment schedule available.
CompareCompareNeat Home Loan
Competitively-priced variable rate loan. Ideal for owner occupiers and investors. No service fees to pay. Make free extra repayments and redraws. Flexible repayment schedule available.
- interest rate
- 6.14% p.a. variable
- comparison rate
- 6.16% p.a.
- interest rate
- 6.14% p.a. variable
- comparison rate
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- Upfront fees
- $250
- Ongoing fees
- $0.00
- Discharge Fee
- $300.00
- Extra repayments
- yes - free
- Redraw facility
- yes - free
- Offset account
- no
- Maximum loan to value ratio
- 60.00%
- minimum borrowing amount
- $80,000
- maximum borrowing amount
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- type of mortgage
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Read our Mozo Review to learn more about the ubank Neat Home Loan
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Mozo experts choice awards won:
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Fixed Rate Home Loan
Owner Occupier, Principal & Interest
interest rate
comparison rate
Initial monthly repayment5.99% p.a.
fixed 2 years6.24% p.a.Secure a low rate and enjoy the certainty of repayments, with the BCU Fixed Rate Home Loan. Save with no ongoing annual fees. Pay up to $25,000 extra during a fixed period (T&Cs apply). Lock in for up to 5 years.
CompareCompareFixed Rate Home Loan
Secure a low rate and enjoy the certainty of repayments, with the BCU Fixed Rate Home Loan. Save with no ongoing annual fees. Pay up to $25,000 extra during a fixed period (T&Cs apply). Lock in for up to 5 years.
- interest rate
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fixed 3 years
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- 6.30% p.a.
- interest rate
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fixed 3 years
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- Discharge Fee
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- Extra repayments
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- Redraw facility
- no
- Offset account
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- Maximum loan to value ratio
- 95.00%
- minimum borrowing amount
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- type of mortgage
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Read our Mozo Review to learn more about the BCU Bank Fixed Rate Home Loan
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Straight Up
Obliterate, Investor, Principal & Interest, <50% LVR
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Initial monthly repayment6.34% p.a. variable6.34% p.a.Investors get a low variable rate depending on your deposit with Athena’s Straight Up Investor Variable Home Loan. AcceleRATES feature helps you to reduce your home loan even faster (T&Cs apply). Zero fees to pay. Free redraw facility. Handy mobile app to manage your home loan.
CompareCompareStraight Up
Investors get a low variable rate depending on your deposit with Athena’s Straight Up Investor Variable Home Loan. AcceleRATES feature helps you to reduce your home loan even faster (T&Cs apply). Zero fees to pay. Free redraw facility. Handy mobile app to manage your home loan.
- interest rate
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- interest rate
- 6.34% p.a. variable
- comparison rate
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- Upfront fees
- $0
- Ongoing fees
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- Discharge Fee
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- Extra repayments
- yes - free
- Redraw facility
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- Offset account
- no
- Maximum loan to value ratio
- 50.00%
- minimum borrowing amount
- $100,000
- maximum borrowing amount
- $2,500,000
- type of mortgage
- Variable
- Repayment types
- Principal & Interest
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- Weekly, Fortnightly, Monthly
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Read our Mozo Review to learn more about the Athena Straight Up
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* WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. The comparison rate displayed is for a secured loan with monthly principal and interest repayments for $150,000 over 25 years.
** Initial monthly repayment figures are estimates only, based on the advertised rate. You can change the loan amount and term in the input boxes at the top of this table. Rates, fees and charges and therefore the total cost of the loan may vary depending on your loan amount, loan term, and credit history. Actual repayments will depend on your individual circumstances and interest rate changes.
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