More than 1.5 million Australians are now considered at risk of mortgage stress as economic uncertainty pushes more households towards financial strain.
Fresh Roy Morgan data has revealed 1,538,000 mortgage holders were classified as being “at risk” in the three months to May, an increase of 65,000 people in just one month.
The figure represents 29 per cent of all mortgage holders and follows three Reserve Bank interest rate increases this year.
The research also found more than one million Australians are in an even more severe category.
A total of 1,084,000 mortgage holders are considered “extremely at risk”, meaning even interest-only repayments consume an unsustainable proportion of household income.
That represents 20.4 per cent of mortgage holders and sits well above the long-term average of 16.4 per cent.
The figures show the number of Australians under mortgage stress has risen by 100,000 people over the past year.
The increase follows the Reserve Bank cutting interest rates in 2025 before they were lifted again in February, March and May this year.
The latest findings add to concerns about household finances as borrowers wait for fresh inflation data from the Australian Bureau of Statistics on Wednesday.
The result is expected to play a significant role in determining whether the Reserve Bank considers another rate increase when it meets in August.
Inflation eased to 4.2 per cent in April but remains well above the Reserve Bank’s target range of two to three per cent.
With that, Roy Morgan expects mortgage stress to continue rising over coming months.
The market research company forecasts the number of borrowers at risk will increase to 1,553,000 in June and 1,562,000 in July as the impact of May’s rate rise continues.
If the Reserve Bank raises rates by another 25 basis points in August, Roy Morgan estimates the number of mortgage holders at risk would climb to 1.6 million.
That would represent 30.2 per cent of all borrowers and push Australia closer to levels recorded during the Global Financial Crisis.
The highest mortgage stress level ever recorded by Roy Morgan was 35.6 per cent in 2008.
While interest rates remain a major factor, Roy Morgan said employment remains the biggest determinant of whether households can keep up with repayments.
The research noted that more than 3.2 million Australians are currently unemployed or underemployed, representing 20.2 per cent of the workforce.
The figures also come as demand for financial assistance continues to grow.
The most recent Sky News Pulse / YouGov poll showed 45 per cent of respondents ranked cost of living as the most important issue facing Australians, as inflation and interest rates eat into household budgets.
This is four per cent higher than when Australians were asked the same question on February 26 and greatly exceeds the second-place priority of immigration – at just 10 per cent.
The poll, which surveyed 1,471 voters between May 26 and June 2, also revealed that 70 per cent of Australians expect energy prices to surge over the coming year.