\u201cFrom this perspective the data tells a pretty clear story,\u201d Rawnsley said.<\/p>\n
\u201cIn the past, paying off a home loan has been a source of security, it\u2019s increasingly a source of anxiety.\u201d<\/p>\n
Mortgage rates hit 17% in mid-1989 (the Reserve Bank\u2019s cash rate peaked at 17.5% in 1990) and stayed around that level for close to a year, according to RBA historical data.<\/p>\n
The KPMG analysis shows how in early 1990 interest payments as a share of household income reached 5.7%, with interest on dwellings at 3.4% and interest on consumer debt of 2.3%.<\/p>\n
Graph showing Australia\u2019s mortgage burden between the late 1980s and now <\/a><\/p>\n Fast forward to early 2026, when home loan rates averaged 8.3% through the three months to March.<\/p>\n Soaring home values have pushed homebuyers to borrow more and more over recent decades, even as home ownership rates<\/a> have tracked steadily lower.<\/p>\n Despite lending rates being only half what they were at the end of the 1980s, households in total were dedicating a much higher 5% of their income to servicing their mortgages, and 5.4% once consumer debt obligations were included.<\/p>\n The total debt burden figure will push towards 6% once the full impact of this year\u2019s three interest rate hikes flow through to borrowing rates, Rawnsley said.<\/p>\n He said while the late 1980s and early 90s were often cited as the historical peak for home loan stress, \u201cthe data shows that borrowers have actually faced tougher conditions over the past few years\u201d.<\/p>\n Of course, homeowners faced other challenges then \u2013 not least an unemployment rate that pushed into double digits.<\/p>\n Rawnsley said the data he analysed was a combined total of household income and interest payments \u2013 and that within the high level numbers was concealed a wide range of outcomes.<\/p>\n \u201cThis aggregate number is the best we can look at,\u201d he said.<\/p>\n skip past newsletter promotion<\/a>Free newsletter | When needed<\/p>\n Sign up to Breaking News Australia<\/p>\n Get the most important news as it breaks<\/p>\n after newsletter promotion<\/p>\n \u201cInside of that will be some first-time buyers up to their eyeballs in debt, those halfway through their mortgage periods and so not too worried, and people who bought 20 years ago who aren\u2019t affected.\u201d<\/p>\n Climbing interest rates, rising cost of living associated with the Middle East conflict<\/a> and recent tax reforms have combined to trigger a dip in Sydney and Melbourne home prices<\/a> over recent months.<\/p>\n![\"\"](\"https:\/\/www.newsbeep.com\/il\/wp-content\/uploads\/2026\/06\/2998.jpg\")
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