Over a million Aussie homeowners at risk of facing mortgage stress, finds Roy Morgan

Collage of a woman looking over the edge.

New research from Roy Morgan reveals that if the Reserve Bank of Australia hikes rates again in December, it could put a quarter (25.1%) of home loan borrowers at risk of mortgage stress.

More Australians may fall behind in the RBA’s war against inflation

Collage of a man plummeting down a red chasm.

By January 2023, over 1.1 million Australian households may have to put anywhere between 25% to 40% of their after-tax incomes towards their mortgage repayments, finds Roy Morgan.

More worryingly, nearly 14.4% of mortgage borrowers are considered ‘Extremely At Risk’ as of October 2022 – the highest level since pre-pandemic. 

The research seemingly corroborates what has been felt at the domestic level since official interest rates first began to climb in May 2022. 

Property prices have plummeted in a chillier housing market, and even the RBA governor has apologised for making misleading and incorrect predictions about the path of rate hikes. 

But with inflation at a thirty-year high, the RBA has prioritised tackling price growth over a decline in real wages – at the expense of homeowners. Rising interest rates may therefore threaten to push more borrowers into the mortgage trap, which has the worrying potential to spark a recession and undo all the RBA’s efforts. It’s a risky gamble.

But does a surge in at-risk mortgage holders mean imminent doom? Not necessarily, explains Roy Morgan chief executive, Michele Levine.

High employment rates hold off recession – for now

Collage of a woman holding up a falling red arrow.

Levine points to employment as a more critical bellwether of distress, since the loss of income hurts far more than rising interest rates. So long as employment levels remain strong, she says, we likely won’t face the spiral of at-risk holdings and mortgage defaults that defined the Global Financial Crisis in 2007 - 2009. 

“The latest Roy Morgan employment estimates show a near-record 13.5 million Australians were employed in October 2022,” continues Levine, up from even pre-pandemic levels, so there is room for optimism.

However, Roy Morgan admits its mortgage risk figures are ‘conservative’, and unemployment has already shown tiny upticks since October.

“Other influences such as increasing inflation, interest rates, and supply chain challenges caused by extreme weather events are set to be key factors driving employment outcomes during the upcoming year,” concludes Levine. 

In the meantime, it falls to homeowners to manage their repayments and the RBA to chart the best path forward.

Why does the RBA do what they do? Learn more in our monetary policy guide. Compare home loans on offer below.

Last updated 7 May 2025 Important disclosures and comparison rate warning*
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    Unloan Variable Home Loan

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    Variable Home Loan 90

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    • Principal & Interest
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    Initial monthly repayment
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  • Unloan Variable Home Loan

    • Owner occupier
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    • 20% min deposit
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    Interest rate
    5.74 % p.a.
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    Initial monthly repayment
    $2,915
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    • The first home loan with an increasing discount (conditions apply)
    • No application or banking fees
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    • Owner occupier
    • Principal & Interest
    • 10% min deposit
    • Offset available
    • Redraw available
    Interest rate
    5.74 % p.a.
    Fixed 2 years
    Comparison rate
    5.81 % p.a.
    Initial monthly repayment
    $2,915
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  • Variable Home Loan

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    Interest rate
    5.78 % p.a.
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    Comparison rate
    5.82 % p.a.
    Initial monthly repayment
    $2,927
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    • $0 application fee to pay
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    • Owner occupier
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    • 20% min deposit
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    5.79 % p.a.
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    Initial monthly repayment
    $2,931
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    • Get up to $4,000 cashback (T&Cs apply)
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  • Variable Home Loan 90

    • Owner occupier
    • Principal & Interest
    • 10% min deposit
    • Offset available
    • Redraw available
    Interest rate
    5.79 % p.a.
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    Initial monthly repayment
    $2,931
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    • No monthly or ongoing fees
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    $2,947
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    6.08 % p.a.
    Initial monthly repayment
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    5.88 % p.a.
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    5.88 % p.a.
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