![\"\"](\"https:\/\/www.newsbeep.com\/nz\/wp-content\/uploads\/2026\/08\/acab477edd9486f0812960a4a79053810f331569ab13b7774fc7636db9ad4fc0.jpeg\")
<\/p>\nMore than a million Aussie borrowers could find themselves trapped in a \u201cmortgage prison\u201d as extreme repayment stress jumps to highest level since 2024 – and it\u2019s lower-income households who are copping the brunt.<\/p>\n
According to new Roy Morgan research, the nationwide rise is being driven primarily by households earning less than $100,000 and those in lower socio-economic brackets.<\/p>\n
<\/p>\n
About 1.53 million homeowners are currently \u201cat risk\u201d of mortgage stress.\u00a0iStock<\/p>\n
The data found an estimated 1.06 million mortgage holders (19.8 per cent) were \u2018Extremely at Risk\u2019 of mortgage stress in the six months to June 2026, up from 16.7 per cent in December 2025, and now higher than in June 2024 (19.3 per cent).\u00a0<\/p>\n
Roy Morgan chief executive Michele Levine said the \u201cextremely at risk\u201d level is based on people putting between 25 per cent and 45 per cent of their after-tax household income towards their home loan.<\/p>\n
She said the percentage is based on the appropriate standard variable rate reported by the RBA and the amount the mortgage holders initially borrowed.<\/p>\n
\u201cThe rise in mortgage stress was underpinned by a combination of rising home loan interest rates and rising inflation, and the volatile impact of the Iran war,\u201d Levine said.<\/p>\n
A jump in mortgage holders \u201cat risk\u201d of mortgage stress, which is a step below extreme risk, increased from 25.2 per cent in December last year to 28.5 per cent in June.<\/p>\n
That is about 1.53 million homeowners.<\/p>\n
![\"Victorians](\"https:\/\/www.newsbeep.com\/nz\/wp-content\/uploads\/2026\/08\/e24551483ce3b7d7b2f895c81a42b87429cb3f28.jpeg\")
<\/p>\n
The Roy Morgan study found that households earning $100,000 or less were at the highest risk of mortgage stress.\u00a09News<\/p>\n
The research said a decline in mortgage stress from June 2024 to December last year was driven by wage growth as inflation declined, income tax cuts<\/a>, home loan interest rate cuts<\/a> and a rising share market.<\/p>\n However, a recent rise in interest rates and inflation this year introduced mortgage stress to more households across Australia, with lower-income families bearing the brunt after little relief over the past 18 months.<\/p>\n While the top 60 per cent of earners saw their mortgage pressure ease between mid-2024 and late 2025, the bottom 40 per cent saw no break at all.<\/p>\n For these households, financial stress<\/a> either got worse or didn\u2019t budge.<\/p>\n The data found that lower-income families took the full impact of the latest jump in early 2026, driving extreme mortgage stress among lower-income households up by about 11 per cent. <\/p>\n While the rising inflation rates in 2026 impacted households of all income-levels the pressure was significantly more for lower earners making less than $100,000.<\/p>\n Unlike higher-income households, this group has faced steady increases in mortgage stress since mid-2024, jumping another 5 per cent earlier this year.<\/p>\n About 1.53 million homeowners are currently \u201cat risk\u201d of mortgage stress.\u00a0Supplied<\/p>\n Fears of exploding levels of borrowers in \u2018mortgage prison\u2019<\/p>\n As\u00a0property<\/a>\u00a0prices continue to drop across\u00a0Australia<\/a>\u00a0and\u00a0interest rates<\/a>\u00a0trend upwards, some borrowers are finding themselves trapped in their current\u00a0mortgages<\/a>\u00a0with no way out.<\/p>\n Mortgage prisoner is the apt term for a borrower trapped in their current mortgage who is unable to refinance their loan.<\/p>\n There can be a mix of factors leading to a borrower becoming trapped in their current loan including their home declining in value, interest rate hikes, or income changes.<\/p>\n Finance Brokers Association Australia director Peter White said banks assess a borrower\u2019s \u201cserviceability\u201d or how much you can afford to pay at a different rate.<\/p>\n For example, interest rates could sit at 5 per cent but the lender will look at your ability to pay up to 8 per cent.<\/p>\n Not only are the current interest rate rises driving more people into the trap but White said banks have \u201cthe nasty habit of repricing the back book\u201d.<\/p>\n \u201cThey look at existing customers and put their home loan rate 0.45 to 0.7 per cent above what other people are paying,\u201d White said.<\/p>\n This means people who are already in a mortgage prison become even further entrapped and White warned more and more people are getting stuck.<\/p>\n","protected":false},"excerpt":{"rendered":"More than a million Aussie borrowers could find themselves trapped in a \u201cmortgage prison\u201d as extreme repayment stress…\n","protected":false},"author":2,"featured_media":560381,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[138,219,111,139,69],"class_list":["post-560380","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-economy","tag-new-zealand","tag-newzealand","tag-nz"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/560380","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=560380"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/560380\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/560381"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=560380"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=560380"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=560380"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}![\"GEN23:](\"https:\/\/www.newsbeep.com\/nz\/wp-content\/uploads\/2026\/08\/7511145b59c9902ad1ba400b6b31c558c412f249.jpeg\")
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