Mortgage stress among Australian borrowers has fallen to its lowest level since early 2023, as the Reserve Bank of Australia’s (RBA) recent rate cuts begin to ease pressure on household budgets.
New research from Roy Morgan shows 25.9% of mortgage holders were “at risk” of mortgage stress in the three months to September 2025 – down two percentage points from August and the lowest share since February 2023.
The figure has remained above one in four mortgage holders since early 2023 and previously peaked at a record 35.6% in mid-2008.
While the latest figures mark a steady recovery, mortgage stress remains well above pre-hike levels.
Since May 2022, when the RBA first lifted the cash rate from 0.1%, the number of Australians considered “at risk” has risen by 554,000. The share of those “extremely at risk” now stands at 16.3% – in line with the long-term average over the past two decades.
Following rate reductions in February, May and August, RBA has lowered the cash rate by a total of 0.75% this year to 3.6%.
Roy Morgan’s modelling shows that if the RBA cuts rates further to 3.35% in November and 3.1% in December, the proportion of borrowers “at risk” could fall below one in four for the first time in nearly three years.
In September, around 1.36 million mortgage holders were considered “at risk”. With another 0.25% cut, that share could fall to 24.4% in November and 23.9% by December – a reduction of about 105,000 borrowers from current levels.
Roy Morgan CEO Michele Levine (pictured) said the RBA’s 0.25% cut in mid-August has clearly improved household resilience.
“The latest Roy Morgan data shows a significant reduction in mortgage stress following the Reserve Bank’s interest rate cut in mid-August,” Levine said in a media release. “In September 2025 there were 1,361,000 Australians ‘at risk’ of mortgage stress – equivalent to 25.9% of mortgage holders – down 2% points since August 2025.”
She noted that if the RBA delivers another 0.25% cut in early November, the share of borrowers “at risk” would fall below one in four for the first time since January 2023.
However, Levine cautioned that lower rates could eventually fuel renewed stress as buyers take on larger loans. She added that while rate cuts have provided short-term relief, employment remains the most critical factor influencing borrowers’ ability to meet repayments.
Roy Morgan’s data underscores that job security, rather than interest rates alone, remains the key determinant of mortgage stress.
More than one in five Australian workers – around 3.24 million people (20.1% of the workforce) – are either unemployed or under-employed. Despite rate relief, households remain vulnerable to any rise in unemployment that reduces income and repayment capacity.
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