1.75 Million Australians at Risk of Mortgage Stress: Is It Time to Review Your Home Loan?

Roy Morgan estimates 31.8% of Australian owner occupier mortgage holders, about 1.75 million people, were at risk of mortgage stress in September 2026, up 7.9 percentage points and 566,000 people since January. A record 23%, or 1,262,000 people, were extremely at risk, well above the long term average of 16.5%. The rise follows four 0.25 percentage point Reserve Bank rate increases in 2026, which took the cash rate to 4.6%, a 15 year high. Roy Morgan projects a further rise in November could lift the number at risk to 1,821,000. These are estimates based on income and repayments, not missed payments. For borrowers in Sydney and Brisbane, now is a good time to review your loan: ask your lender for a better rate, compare the full cost of switching, and if repayments are already hard to meet, contact your lender early about a hardship variation.

Mortgage stress doesn't begin when you miss a repayment. It begins when your financial flexibility starts to disappear.

Roy Morgan estimates based on household income and repayment commitments. They do not mean these borrowers have missed repayments or defaulted.

About 1.75 million. Roy Morgan's research, released on 27 October 2026, found 31.8% of owner occupier mortgage holders were at risk of mortgage stress in September 2026, an increase of 566,000 people since January. A record 23%, or 1,262,000 people, were classified as extremely at risk, compared with a long term average of 16.5%.

The figures follow four Reserve Bank rate increases in 2026, in February, March, May and late September, which took the cash rate to 4.6%, a 15 year high. The share at risk eased by 0.5 percentage points between August and September, which Roy Morgan attributes mainly to rising household incomes among mortgage holders, but it remains far higher than at the start of the year.

Importantly, these are estimates based on household income and repayment commitments. They do not mean 1.75 million Australians have missed repayments or defaulted on their home loans.

It means repayments take up a large share of household income. Roy Morgan classifies a household as at risk when its home loan repayments exceed a set share of after tax income, between 25% and 45% depending on income and spending. The extremely at risk category applies the same test to interest only repayments on the amount still owed.

Mortgage stress isn't always obvious. A household may keep meeting every repayment while running down savings, cutting spending or relying more on credit for other expenses. For many homeowners, the first sign of pressure is not a missed payment, but the gradual disappearance of financial flexibility.

Yes, according to Roy Morgan's modelling. A 0.25 percentage point increase in November, taking the cash rate to 4.85%, could lift the number at risk to 1,821,000, or 33.1%. A further increase in December, to 5.1%, could push it to 1,887,000, or 34.3%.

These are scenarios, not confirmed decisions. But they show why it pays to understand how rate changes would affect your budget, because even small changes in borrowing costs matter on a large mortgage.

It may help, but it isn't automatically the right answer. Depending on your circumstances, refinancing can mean a sharper rate, a restructured loan or features that better suit your needs. Moneysmart suggests first telling your current lender you are considering a cheaper loan elsewhere, as they may lower your rate to keep your business. Before deciding, work through these questions:

1. Check whether your rate is competitive. Your loan may no longer reflect what lenders offer borrowers with a similar profile.

2. Compare the whole arrangement. Fees, features, flexibility and total cost matter as much as the headline rate.

3. Watch the loan term. A longer term can lower repayments but increase total interest, so aim for a term similar to what you have left.

4. Review your financial position. Income, employment, property value, debts and expenses all affect eligibility.

5. Count the switching costs. Discharge, application and switching fees, and lenders mortgage insurance if you have less than 20% equity, can reduce the benefit.

A good mortgage review looks at the complete financial picture, not just the advertised rate.

Talk to your lender early. Lenders assess borrowing capacity, repayment history and circumstances before approving a new loan, so a household already struggling may not be able to switch. But other options exist.

You can ask your lender's hardship officer for a hardship variation, a change to your loan terms to make it easier to manage. Lenders may be able to change your loan terms or temporarily pause or reduce repayments, and they must write to you within 21 days with the outcome. Moneysmart's advice is clear: the earlier you get help, the more options you will have. Free financial counselling is available through the National Debt Helpline on 1800 007 007, and if you can't reach agreement with your lender, the Australian Financial Complaints Authority offers free, independent dispute resolution.

Because larger loan balances make borrowers more sensitive to rate changes. Sydney and Brisbane both have many households carrying substantial mortgages. But stress depends on more than the size of the loan: income, other debts, job security, family commitments and living costs all shape repayment capacity. Two households with similar mortgages can face very different levels of pressure, which is why personalised advice is more useful than national headlines.

If you haven't reviewed it recently, probably yes. A loan that suited you when it was set up may not be the best arrangement several years later, after changes in rates, work, family or goals. Reviewing before pressure builds gives you more options than waiting until things become difficult. Olive Road Financial helps homeowners in Sydney, Brisbane and beyond review their home loans and understand their refinancing options. Book a home loan review to see whether your mortgage still suits your needs.

A home loan isn't a set and forget product. With four rate rises this year, many borrowers are paying more than they need to, simply because their loan hasn't been reviewed since it was set up. Asking the question early, while you still have choices, is the best protection against mortgage stress. If repayments are already tight, the most important step is to talk to your lender before a payment is missed.

Mortgage stress doesn't begin when you miss a repayment. It begins when your financial flexibility starts to disappear.

Olive Road Financial is a mortgage broking business with teams in Sydney and Brisbane, helping clients with home, investment and commercial lending. We compare lenders, explain how each one assesses borrowing capacity and look after the application from preapproval to settlement. Thinking of buying, refinancing or investing? Book an appointment with the Olive Road Financial team.

All sources accessed 30 October 2026. This article is general information only and does not take your objectives, financial situation or needs into account. It is not credit, financial or tax advice. Lending criteria, fees and charges apply. Speak with a qualified mortgage broker before making a decision. Loan suitability, refinancing eligibility and available options depend on individual circumstances.

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