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According to the latest research released by market research and polling company Roy Morgan, 24.7 per cent of owner-occupied mortgage holders were considered “at risk” of mortgage stress in the three months to November 2025.
This equates to 1,249,000 households and represents a decline of 3.2 percentage points since August 2025, when the Reserve Bank of Australia (RBA) last cut the cash rate.
Roy Morgan’s mortgage stress estimates are based on its ongoing Single Source Survey, which interviews more than 60,000 Australians each year, including over 10,000 owner-occupied mortgage holders.
Mortgage holders are classified as “at risk” when repayments exceed a sustainable share of household income after essential living costs and “extremely at risk” when even interest-only repayments are unaffordable.
The number of Australians considered ‘extremely at risk’ is now numbered at 852,000 (16.8 per cent of mortgage holders), just above the long-term average over the last two decades of 16.3 per cent.
Roy Morgan said that this result reflects the cumulative impact of three interest rate cuts delivered by the RBA in February, May, and August last year, which lowered the cash rate by a total of 0.75 percentage points to 3.6 per cent.
Interest and inflation risks
Although the number of Australians under stress is at a three-year low, Roy Morgan’s long-running data series showed that mortgage stress remains structurally higher than it was before the current tightening cycle began.
Since May 2022, when the RBA commenced interest rate increases, the number of Australians considered at risk of mortgage stress has risen by 442,000. Over that period, the cash rate increased by a cumulative 4.25 percentage points, from 0.1 per cent to a peak of 4.35 per cent between November 2023 and February 2025.
Historically, the highest level of mortgage stress measured by Roy Morgan occurred in mid-2008 during the global financial crisis, when 35.6 per cent of mortgage holders were considered at risk.
While current levels are well below that peak, Roy Morgan warned the recent improvement could be short-lived.
Inflation has reaccelerated in the second half of 2025, rising from an annual rate of 1.9 per cent in the year to June to 3.4 per cent in the year to November, based on ABS data.
Most major banks are not predicting rate cuts anywhere in the near future, with some forecasts pointing to rate increases in 2026.
Using its conservative modelling approach, which assumes all factors other than interest rates remain unchanged, Roy Morgan has estimated the impact of a potential 0.25 percentage point increase in the cash rate at the RBA’s February 2026 meeting. Under this scenario, the proportion of mortgage holders at risk of stress would rise to 25.5 per cent, equivalent to around 1,290,000 households, an increase of approximately 41,000.
Other factors at play
Roy Morgan CEO Michele Levine said the survey results highlight the sensitivity of household finances to changes in economic conditions.
Levine emphasised that while interest rates influence mortgage stress, employment and income are also dominant drivers.
“It is important to appreciate that interest rates are only one of the variables that determine whether a mortgage holder is considered at risk,” she said.
“The largest impact on whether a borrower falls into the ‘at risk’ category is related to household income, which is directly related to employment.
“The employment market has been strong over the last three years and this has provided support to household incomes, which have helped to moderate levels of mortgage stress over the last year, along with the three interest rate cuts by a total of 0.75 per cent.”
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