A foundational assumption of consumer lending — that Australians will do almost anything to protect their mortgage repayments — is being challenged by new data from Experian.
Analysis drawn from the credit bureau's Business Pulse Monthly (April 2026) finds that as financial stress intensifies, the traditional repayment hierarchy is breaking down in ways that carry direct implications for lenders, brokers, and portfolio management.
In the early stages of financial difficulty, the pattern remains familiar: credit cards are typically the first repayment to slip, measured at 30-plus days past due. But when stress deepens to 90-plus days past due — the threshold of severe arrears — the picture has changed materially since the rate hike cycle began.
Mortgage arrears are now as likely as credit cards to be the first account to fall into severe arrears, a shift Experian attributes to repayment capacity pressures outweighing entrenched repayment priorities.
Adding a further wrinkle, auto loans have emerged as the product least likely to slip first at the 90-plus day mark, suggesting that access to a vehicle — for work, family logistics, and daily life — has become a higher priority than the home loan for a meaningful share of stressed borrowers.
The shift is not evenly distributed across borrower profiles. Using Experian's Mosaic segmentation, the analysis found affluent suburban households were more likely to fall behind first on mortgages under severe stress, while lower-income and regional households were more likely to let credit cards and personal loans slide before the home loan — a reversal of what conventional risk models might assume.
The age dimension tells a similar story of divergence. Younger borrowers — particularly those aged 18 to 25 — continue to prioritise their mortgage, remaining the least likely cohort to let a home loan slip into severe arrears first.
In the 12 months to December 2025, borrowers over 55 showed a 75% probability of their mortgage slipping before auto loans once accounts reached 90-plus days past due — suggesting the shift is concentrated among those further along in their borrowing life.
Louis Tsang (pictured), head of analytics consulting and insights at Experian, said the findings underscore the limitations of treating arrears data in isolation.
"Our analysis suggests repayment order can change as stress becomes more severe, and it isn't uniform across all customer segments," Tsang said. "For lenders and portfolio teams, the key is to interpret early warning signals alongside customer context, product type, and the broader environment to tailor approaches across different customer segments."
For mortgage brokers, the practical implication is significant. A client who is current on their credit card but behind on their mortgage may be further along the financial stress curve than conventional signals suggest — and a client current on their mortgage but slipping on a car loan may not be. Understanding which repayment is slipping first, and for whom, is becoming as important as whether any repayment stress is present at all.
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