Roy Morgan’s latest research shows that the share of owner-occupier mortgage holders at risk of severe repayment difficulties has eased in the past year.
An estimated one million mortgage holders (18.5%) were “extremely at risk” of mortgage stress in the 12 months to June 2025, down from 19.7% a year earlier. A broader measure of stress, those “at risk”, also fell from 30.3% in June 2024 to 27.8% in June 2025, covering 1.5 million households.
According to Roy Morgan, the improvement reflects real wage growth, income tax cuts, lower interest rates, and share market gains over the past year.
The decline, however, was limited to higher-income households. While the proportion of mortgage holders at “extreme risk” fell nationally, it only decreased among the top three socio-economic quintiles (60% of Australians).
For lower-income households, stress intensified. Mortgage holders in the E quintile recorded a 5% increase, while those in the FG quintile saw a 5.2% rise in the share “extremely at risk”.
The gap was linked to weaker income growth and job losses. Household income rose 7% across all mortgage holders, but only 1.5% in the E quintile and 2.1% in the FG quintile.
Employment trends also diverged: full-time employment was broadly stable overall (+0.2%) but fell 1.3% in the E quintile and 11.6% in the FG quintile.
Mortgage stress has only eased for households earning above $100,000 per year, with those below this level more likely to remain “extremely at risk”.
Roy Morgan CEO Michele Levine (pictured) said the data shows progress but also highlights widening stress among vulnerable groups.
“The proportion of mortgage holders classified as at ‘extreme risk’ of mortgage stress declined from 19.7% in June 2024 to 18.5% in June 2025,” Levine said. “This improvement was underpinned by a combination of real wage growth, tax relief, falling home loan interest rates, and a stronger share market.”
She noted the benefits were not shared equally.
“However, the benefits of these positive economic trends have not been evenly distributed,” Levine said. “The reduction in mortgage stress was concentrated among households in the top three socio-economic quintiles, representing 60% of Australians.
“In contrast, mortgage stress increased among those in the bottom two quintiles (40% of Australians). Specifically, mortgage stress levels rose by 5% in the E quintile and 5.2% in the FG quintile.”
Levine added that sluggish income growth and falling employment were key contributors.
“While household income among mortgage holders overall rose by 7% over the year to June 2025, those in the E and FG quintiles saw only modest gains of +1.5% and +2.1%, respectively,” Levine said.
“Additionally, while full-time employment among mortgage holders remained broadly stable (+0.2%), it declined sharply in the lower quintiles falling by -1.3% in the E quintile and a significant -11.6% in the FG quintile.”
For brokers, the data highlights the importance of tailoring conversations to client segments. Lower-income borrowers remain highly vulnerable, with slower income growth and job insecurity increasing repayment risk.
Brokers may find more demand for refinancing, debt consolidation, or flexible repayment structures in these groups, while higher-income households could present opportunities for upgrades or investment borrowing given their improved position.
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