iscover 
New data from research company Roy Morgan has revealed that mortgage stress has hit its lowest level for over two years.
Roy Morgan’s Single Source Survey (based on interviews of 60,000 Australians, including over 10,000 owner-occupier mortgagors) shows 25.3 per cent of mortgage holders were “at risk” of mortgage stress in the three months to October 2025.
Roy Morgan classifies mortgage holders as ‘At Risk’ when repayments exceed a set share of household income and ‘Extremely At Risk’ when even interest-only payments surpass that threshold.
The new figures show overall stress was down 2.6 percentage points from August.
This marks the lowest share since February 2023, when the proportion first rose above one-in-four and remained elevated through the subsequent tightening cycle.
The decline follows the Reserve Bank of Australia’s (RBA) mid-August decision to reduce the cash rate to 3.6 per cent – its third rate cut of 2025.
While stress levels have eased, they remain well above pre-tightening lows and reflect the cumulative impact of rate rises that lifted the cash rate from 0.1 per cent in May 2022 to 4.35 per cent by late 2023.
Roy Morgan found the number of Australians at risk of mortgage stress has grown by 518,000 since the start of the tightening cycle. A total of 903,000 mortgage holders (17.3 per cent) are considered “extremely at risk”, slightly above the long-term two-decade average of 16.3 per cent.
The research also highlighted labour market pressures, with unemployment and underemployment now affecting an estimated 3.28 million Australians – more than one-in-five workers. Roy Morgan noted that employment – rather than interest rates alone – remains the biggest determinant of mortgage stress.
Inflation has also re-accelerated in recent months, rising from 1.9 per cent in June to 3.5 per cent in September. The RBA held rates steady in October and November as a result, and Roy Morgan warned that more than a quarter of mortgage holders are likely to remain in stress for the foreseeable future.
Speaking of the findings, Michele Levine, CEO at Roy Morgan, said mortgage stress hit its lowest level since February 2023 in October. However, the Reserve Bank’s decision to leave interest rates unchanged in November is set to lead to over one-in-four mortgage holders remaining in mortgage stress indefinitely.
“The latest Roy Morgan data shows a reduction in mortgage stress in October 2025 as the Reserve Bank’s interest rate cut in mid-August continued to flow through the economy. In October there were 1,325,000 Australians ‘At Risk’ of mortgage stress – equivalent to 25.3 per cent of mortgage holders – down 0.6 per cent points from September, and down a total of 2.6 per cent points since August 2025,” Levine said.
“However, in recent months inflation has re-accelerated from an annual rate of 1.9 per cent in the year to June 2025 (ABS annual monthly estimate) to 3.5 per cent in September 2025 (ABS monthly annual estimate) – an increase of 1.6 per cent points in only three months.
“This rapidly increasing level of official estimated inflation over the last few months has led the Reserve Bank to leave interest rates unchanged in both October and November. These decisions are set to leave over one-in-four mortgage holders in mortgage stress indefinitely.
“Finally, it is important to appreciate 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 three years (the latest Roy Morgan estimates show nearly 1 million new jobs created since May 2022) and this has provided support to household incomes which have helped to moderate levels of mortgage stress over the last year.”
[Related: Majority of single mortgage holders experience mortgage stress]