Study suggests the share could climb above 30% by May
About 1.32 million mortgage holders (24.9%) were “at risk” of mortgage stress in the three months to February 2026, up one percentage point from January after the Reserve Bank lifted the cash rate by 0.25 percentage points in early February to 3.85%, research from Roy Morgan has shown.
According to the market research firm, this was the first rise in mortgage stress since August 2025, when the RBA last cut rates prior to February. The series peak remains mid-2008, when 35.6% of mortgage holders were in mortgage stress.
Despite the monthly increase, Roy Morgan estimated 232,000 fewer Australians were “at risk” than a year earlier, after the RBA’s 2025 easing cycle reduced rates by a combined 0.75 percentage points from 4.35% in February 2025 to 3.6% from August 2025 through January 2026, before tightening resumed. It put the number of those “extremely at risk” at 918,000, or 17.3% of mortgage holders, slightly above the long-term average of 16.3%.
The RBA lifted rates again last week by a further 0.25 percentage points to 4.1%. The firm linked the tightening to higher inflation, noting official annual inflation rose from 1.9% in the year to June 2025 to 3.8% in the year to January 2026.
Roy Morgan modelled the March move as lifting the “at risk” share to 26.6%, or 1.41 million mortgage holders, up 93,000 from February. It forecast 28.8% in April, or 1.53 million, and said a further 0.25-point RBA cash rate hike in May to 4.35% would lift the “at risk” share to 30.3%, or 1.6 million.
“The outbreak of conflict in the Middle East in late February, following the Israeli and US attacks on Iran, has introduced a considerable amount of uncertainty into global economic forecasts,” said Michele Levine (pictured right), chief executive of Roy Morgan.
“Given this uncertainty, Australia is set to face a wave of inflation prompted by soaring energy prices, or an economic slowdown due to rising energy prices impacting demand elsewhere in the economy.
“Since the conflict in the Middle East began, ANZ-Roy Morgan Inflation Expectations have increased significantly, up 1.6% points in a matter of weeks to a record high of 6.9%, and at the same time, average retail petrol prices have increased by over 70 cents per litre (+43.3%) to a new record high of $2.38 – both strong indications of high inflation on the way.”
Levine also pointed out that interest rates are only one of the variables that determines whether a mortgage holder is considered ‘at risk’ – the largest impact on whether a borrower falls into the ‘at risk’ category is related to household income – which is directly related to employment.
“The employment market has been strong over the last four years, with Roy Morgan estimates showing 1.3 million new jobs have been created since the Albanese government was elected in May 2022,” she said. “This has provided support to household incomes which have helped to moderate levels of mortgage stress despite interest rates increasing rapidly since May 2022.”
Want to be regularly updated with mortgage news and features? Get exclusive interviews, breaking news, and industry events in your inbox – subscribe to our FREE daily newsletter. You can also follow us on Facebook, X (formerly Twitter), and LinkedIn.
