Almost a third of owner-occupier mortgage holders are now considered at risk of mortgage stress, and the banking regulator says late repayments are starting to rise. Both reads landed on Thursday, five days before a widely expected fifth rate rise of the year. Here's what the numbers actually say, why most borrowers are still coping, and the practical steps worth taking now if your repayments are starting to pinch.
The short version
- Roy Morgan estimates 31.8% of owner-occupier mortgage holders, about 1.75 million people, were "at risk" of mortgage stress in the three months to September 2026.
- That is 0.5 points lower than in August, but 7.9 points higher than in January. A record 1.26 million (23%) are "extremely at risk".
- APRA told a Senate committee on Thursday that arrears of 30 days or more are "ticking up" across all kinds of borrowers, though they remain at low levels overall.
- APRA's chair also said stressed borrowers are going to their banks earlier, and repayment plans are being worked through.
- All four big banks expect the cash rate to rise from 4.60% to 4.85% on Tuesday. Canstar estimates that would add about $92 a month on a $600,000 loan.
What Roy Morgan's numbers show
Roy Morgan's latest mortgage stress research, reported on 29 October, covers the three months to September 2026. It found 31.8% of owner-occupier mortgage holders were "at risk" of mortgage stress, or about 1.75 million people. Roy Morgan considers a borrower at risk when their repayments take up a large share of their household income.
There's a small piece of good news in there. The share is 0.5 percentage points lower than in August. Roy Morgan chief executive Michele Levine put the easing down to higher household incomes among mortgage holders. But the bigger picture is a steady climb: the figure is 7.9 points higher than in January, after rate rises in February, March and May. The fourth rise, in late September, took the cash rate to 4.60%, and came too late to show up in most of the survey period.
The sharper end of the picture is the group Roy Morgan calls "extremely at risk". A record 1.26 million mortgage holders, or 23%, fall into it. That's well above the two-decade average of 16.5%.
Roy Morgan also modelled what further rises could do. These are scenarios, not forecasts:
| Cash rate | Share "at risk" | Mortgage holders |
|---|---|---|
| 4.60% (three months to September, actual) | 31.8% | About 1.75 million |
| 4.85% (modelled rise in early November) | 33.1% | About 1.82 million |
| 5.10% (modelled scenario of a further rise in December) | 34.3% | About 1.89 million |
Source: Roy Morgan, as reported by Australian Broker, 29 October 2026. The 4.85% and 5.10% rows are Roy Morgan's modelled scenarios, not forecasts. A December rise is not what the big four banks currently expect.
Both modelled figures would be records in raw numbers, but both are still below the 35.6% peak of 2008, when the cash rate reached 7.25%. "Concerningly, inflation pressures in the Australian economy persist," Levine said.
What APRA told the Senate
Separately on Thursday, the Australian Prudential Regulation Authority, which supervises the banks, appeared before the Senate economics committee. Deputy chair Therese McCarthy Hockey confirmed that arrears of 30 days or more are getting worse for all kinds of borrowers. "They are ticking up and there are elements of some greater indication of hardship coming through," she said.
APRA data cited in the hearing coverage showed 1.01% of all home loans were 90 or more days in arrears (in default) in June, up from 0.99% in March. That's a June figure, so it doesn't yet capture the September rise or anything since.
APRA chair John Lonsdale stressed that arrears are still at low levels, but said the regulator is "closely watching the employment market", with unemployment at a five-year high of 4.7% in September. That's why the jobs market matters so much: for many households, a drop in income is what turns a tight budget into missed repayments.
Lonsdale also made the point that is most useful for anyone feeling stretched. Banks are telling APRA that "customers who are experiencing mortgage stress are going to the banks earlier, they're talking about possible options, repayment plans are being worked through and there's a much better triaging of mortgage stress than was once the case."
He also noted a trend APRA is watching: more first home buyers borrowing at 90 to 95% of the property's value since the expanded 5% Deposit Scheme, though he said the data is incomplete.
The other side of the ledger
None of this means a mortgage crisis. The Reserve Bank's October 2026 Financial Stability Review found most mortgaged households remain well placed to handle tougher conditions, even if house prices fell sharply, while flagging pockets of stress. Roy Morgan's "at risk" measure is a warning light about thin margins, not a count of people missing repayments. The arrears rate, while rising, is still around one in a hundred loans.
The honest summary is that most borrowers are coping, but for a lot of households the buffer is thinner than it was at the start of the year, and another rise would take a little more of it.
What next week could add
All four major banks expect the RBA to lift the cash rate by 0.25 percentage points to 4.85% when it announces its decision at 2:00pm Adelaide time (2:30pm AEDT) on Tuesday 3 November. That's a forecast, not a decision. Canstar estimates a rise passed on in full would add about $92 a month to minimum repayments on a $600,000 loan, taking the total increase across five rises this year to about $456 a month. That's based on an owner-occupier paying principal and interest with 25 years remaining in February 2026. As a rough guide, scale it at about $15 a month per $100,000 owed.
What you can do now
- Run your own numbers. Add roughly $15 a month for every $100,000 you owe to your current repayment, and check your budget still works from December, when lenders typically start passing on a rise. If it does, good. If it doesn't, you have a few weeks to plan rather than react.
- If it's getting tight, talk to your lender early. That's APRA's own message: people who speak up early are getting repayment plans worked out. Under the National Credit Code you can ask your lender for a hardship variation if you're having trouble meeting repayments, and you don't have to have missed a payment first. Your lender must consider the request, though it isn't obliged to agree to any particular arrangement. The National Debt Helpline is free on 1800 007 007.
- Check your rate before you cut back elsewhere. Many existing borrowers pay more than lenders offer new customers. Ask your lender for a better rate, or compare refinance options using comparison rates rather than headline rates, and weigh up fees and whether switching is really worth it.
- Use your buffers deliberately. Offset and redraw balances are there for exactly this, but think twice before running them down to zero. A buffer that covers a few months of repayments is what gives you room if something else goes wrong.
- Watch for repayment changes you didn't choose. If your lender recalculates your minimum repayment, check the new figure against your budget. Our piece on Suncorp borrowers moving to ANZ explains how that can happen.
- Buying with a small deposit? Borrowing at 90 to 95% of the property's value leaves less room if prices or rates move. Build in a buffer, and get your pre-approval rechecked after Tuesday's decision.
What happens next
The RBA announces its decision at 2:00pm Adelaide time on Tuesday 3 November, alongside updated forecasts in its November Statement on Monetary Policy. The next big read on household pressure will be the labour market: as APRA made clear, jobs are what turn tight budgets into missed repayments. We'll cover the decision on Tuesday afternoon.
Related reading
- Inflation just hit 4.3%, and all four big banks now expect a rate rise on Melbourne Cup Day (Thursday 29 October)
- Suncorp borrowers could see minimum repayments jump when their loans move to ANZ (Monday 19 October)
- Unemployment just hit a five-year high (Friday 16 October)
- How to tell if switching is actually worth it (Tuesday 20 October) and Advertised rate or comparison rate? (Saturday 10 October)
- Most mortgage holders are still coping: the RBA's October Financial Stability Review (Wednesday 7 October)
Repayments starting to feel tight?
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Sources: 1. Australian Broker, Mina Martin, "Nearly one in three mortgage holders at risk of stress: Roy Morgan", 29 October 2026 — 31.8% / 1.75 million at risk (three months to September 2026); −0.5 pts on August, +7.9 pts on January; 1.26 million / 23% extremely at risk vs 16.5% two-decade average; modelled 33.1% / 1.82 million at 4.85% and 34.3% / 1.89 million at 5.1%; 2008 peak 35.6% at 7.25% cash rate; Michele Levine comments; RBA October 2026 FSR summary (https://www.brokernews.com.au/news/breaking-news/nearly-one-in-three-mortgage-holders-at-risk-of-stress-roy-morgan-290229.aspx). 2. The Nightly, Stephen Johnson, "Australian Prudential Regulation Authority reveals mortgage arrears are getting worse", 29 October 2026 — Therese McCarthy Hockey and John Lonsdale comments at Senate estimates; unemployment 4.7% in September; 1.01% of home loans in default in June vs 0.99% in March; 90–95% LVR trend (https://thenightly.com.au/business/australian-prudential-regulation-authority-reveals-mortgage-arrears-are-getting-worse-c-23088467). 3. Canstar, "Inflation to push cash rate back to highest setting since GFC", 28 October 2026 — all four majors forecast +0.25 to 4.85%; +$92 a month / $456 cumulative on $600,000 (https://www.canstar.com.au/news/inflation-push-cash-rate-back-highest-since-gfc/). 4. RBA cash rate target 4.60%; next Monetary Policy Decision Tuesday 3 November 2026, 2:30pm AEDT (2:00pm Adelaide time).
General information only, not credit advice.
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