Almost one third of home loan borrowers are now in mortgage stress says Roy Morgan, almost back to GFC levels in 2008

New research from Roy Morgan shows 32.5% of mortgage holders ‘At Risk’ of ‘mortgage stress’ in July 2026, up 2.2% points from June 2026 and after three interest rate increases from the Reserve Bank (RBA) during the first few months of this year.

The 32.5% of mortgage holders ‘At Risk’ of mortgage stress is equivalent to 1,786,000 people – up 180,000 on a month earlier – the highest level of mortgage stress for 18 years. The highest level of mortgage stress ever recorded by Roy Morgan is 35.6% reached four months earlier in mid-2008 when official interest rates hit a 30 year high of 7.25% (March – September 2008).

The rising level of mortgage stress is due to a combination of the RBA raising interest rates three times this year (+0.75% to 4.35%), pressure on labour markets. Roy Morgan’s July labour market report shows overall employment, and importantly full-time employment, are both down on highs reached earlier in the year, and the negative impacts on household incomes which have softened since earlier in the year.

341,000 more Australians ‘At Risk’ of mortgage stress than a year ago

Compared to a year ago the number of Australians ‘At Risk’ of mortgage stress is up 341,000 after the RBA cut interest rates in 2025 (to 3.85% in July 2025) but then raised them back up in 2026 (+0.75% to 4.35%). As a result of these changes, interest rates were at 4.35% in July 2026, 0.5% higher than a year earlier in July 2025 (3.85%).

The number of Australians considered ‘Extremely At Risk’, is now numbered at 1,210,000 (22% of mortgage holders) which is significantly above the long-term average over the last two decades of 16.4%.

Mortgage Stress – % of Owner-Occupied Mortgage-Holders (June 2008 – July 2026)

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Source: Roy Morgan Single Source (Australia), average interviews per 3-month period April 2007 – July 2026, n=2,900.
Base: Australians 14+ with owner occupied home loan.

Mortgage Stress – % of Owner-Occupied Mortgage-Holders (January 2020 – July 2026)

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Source: Roy Morgan Single Source (Australia), average interviews per 3-month period November 2019 – July 2026, n=3,243.
Base: Australians 14+ with owner occupied home loan.

How are mortgage holders considered ‘At Risk’ or ‘Extremely At Risk’ determined?

Roy Morgan considers the risk of ‘mortgage stress’ among mortgage holders in two ways:

Mortgage holders are considered ‘At Risk’[1] if their mortgage repayments are greater than a certain percentage of household income – depending on income and spending.

Mortgage holders are considered ‘Extremely at Risk’[2] if even the ‘interest only’ is over a certain proportion of household income.

Unemployment is the key factor which has the largest impact on income and mortgage stress

It is worth understanding that Roy Morgan uses a conservative forecasting model, essentially assuming all other factors apart from interest rates remain the same.

The latest figures on mortgage stress show that weakness in employment markets in the last few months is beginning to negatively impact levels of household income – including Australians with large mortgages.

This impact is supported by an analysis of Roy Morgan’s unemployment estimates over the last few months which show weak employment markets with both overall employment, and importantly full-time employment, lower in the last few months than earlier in the year.

The latest Roy Morgan unemployment estimates show over one-in-five Australian workers are either unemployed or under-employed – 3,228,000 (20.4% of the workforce) – In July Australian ‘real unemployment’ was virtually unchanged at 11.6%, but workforce and employment both contracted.

Mortgages ‘At Risk’ set to rise further if the Reserve Bank increases interest rates again

The Reserve Bank (RBA) raised interest rates three times in early 2026 by a total of 0.75% to 4.35%. These increases were due to the official ABS annual inflation rate more than doubling from 1.9% in the year to June 2025 to a high of 4.6% in the year to March 2026. Official estimates of inflation are now at 3.8% in the year to June 2026 – still above the Reserve Bank’s preferred target range.

Because of this, Roy Morgan modelled the impact of a potential RBA interest rate increase at their next meeting in late September (+0.25% to 4.6%).

If the RBA increases interest rates in September to 4.6% the share of mortgage holders considered ‘At Risk’ of mortgage stress would increase to 32.7% (up 0.2% points from now) – equivalent to 1,798,000 mortgage holders, up 12,000 from now.

Looking forward into October, the share of mortgage holders considered ‘At Risk’ would increase to 33.1%, up 0.6% points from now – equivalent to 1,818,000 mortgage holders, up 32,000 from now.

Mortgage Risk projections based on an interest rate increase in September 2026

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Source: Roy Morgan Single Source (Australia), May 2026 – July 2026, n=3,722.
Base: Australians 14+ with owner occupied home loan.