Borrow
Are Australian mortgages held together by government support?
The response by the banks and the government to the COVID-19 pandemic has seen mortgage stress fall to a near record low, but dangers remain when support is withdrawn, consumer research has found.

Are Australian mortgages held together by government support?
The response by the banks and the government to the COVID-19 pandemic has seen mortgage stress fall to a near record low, but dangers remain when support is withdrawn, consumer research has found.

Survey results by Roy Morgan show that an estimated 751,00 mortgage-holders or around 20 per cent were at risk of mortgage stress in three months to August 2020.
This is near the record low of last year when 723,000 mortgage-holders were considered at risk.
Of those “at risk”, more than half (433,000 or 12.5 per cent of all mortgage-holders) were considered “extremely at risk” – also near the record low of 425,000 reported a year ago in the three months to October 2019.
Roy Morgan’s chief executive, Michele Levine, said the COVID-19 crisis has sent an unprecedented shock through the Australian economy, with the government and banks preventing or at least putting off the potential real estate crisis.
“These figures are somewhat deceptive as they rely on an unprecedented level of support provided to the economy. The federal government has subsidised workers with the $1,500 a fortnight JobKeeper wage subsidy, the almost doubled JobSeeker payment of over $1,100, and allowed businesses to trade while insolvent this year to keep people employed,” Ms Levine noted.
The Australian Prudential Regulation Authority (ARPA) pointed out that banks have deferred around $160 billion or 9.6 per cent of mortgages, providing temporary relief for mortgage-holders.
“APRA figures show that those holding loans with a loan-to-value ratio above 90 per cent were significantly more likely to take up a repayment deferral. These loans make up 5 per cent of all housing loans, but 9 per cent of deferred loans, and are for borrowers more likely to fall into an ‘at risk’ category if they were to become unemployed or fall upon hard times,” Ms Levine explained.
“Because of these measures, the impact of COVID-19 is yet to be fully felt, but we already know there will be significant pressures emerging when the support ends.”
The researcher also pointed to employment data by Roy Morgan, which showed that an estimated 11.2 million Australians have experienced some change in their employment due to the pandemic – with the majority experiencing negative changes, including reduced hours or loss of work.
“Over the many years of our research into mortgage stress, the data shows clearly the loss of a job is the biggest driver of increased mortgage stress as the reduction in income causes an immediate jump into a ‘risk’ category,” Ms Levine said.
“Over two in three mortgages rely on more than one income, and our analysis shows losing even the lower of these two incomes causes an immediate quadrupling of those mortgage-holders considered ‘at risk’ or ‘extremely at risk’.”
With JobKeeper being reduced in early October 2020 before being completely stopped by April 2021, coinciding with the banks’ deferral period ending, Ms Levine pointed to stressful times ahead.
“One of the biggest tasks for banks during the present period is to determine which customers will be able to return to paying their mortgage in the period ahead and which customers will not have that capacity when the deferrals end early next year,” Ms Levine concluded.
About the author

About the author


Loans
Mortgage stress reaches 3-year low
Despite mortgage-holders experiencing record levels of comfort, red flags are emerging with financial stress tipped to rise, new research has revealed. ...Read more

Loans
How to reduce your home loan turnaround time
A surge in consumers looking to borrow continues to put pressure on lenders, leading to delays in processing times, research has revealed. ...Read more

Loans
Consumer advocacy groups fight to save safe lending laws
Twenty-two thousand Australians have joined the Senate economics committee hearing to fight against proposed changes to safe lending laws, which are designed to make it easier for consumers to get th...Read more

Loans
Banking industry continues support for struggling Australians
The banking industry has announced that it will continue to support Australian mortgage-holders who have been negatively impacted by the COVID-19 pandemic. ...Read more

Loans
Commbank announces green loans
Australia’s largest bank has announced a new green loan, which home owners can use to buy and install renewable technology in the family home. ...Read more

Loans
‘A disastrous winding back of consumer protections’: Industry group warns
The government’s proposed changes to consumer lending laws will harm Australian consumers and families while hindering the economic recovery it is intended to promote, a consumer advocacy group has ...Read more

Loans
One in two Aussies does not believe banks act in their best interests when refinancing
Australians looking to take advantage of record-low interest rates are unlikely to speak with their bank, but have a high level of trust in mortgage brokers, new research has revealed. ...Read more

Loans
Home lending surge shatters records with $24bn in loans
The total value of loan commitments for investor housing rose 6 per cent month-on-month to reach $5.6 billion in November last year, as the property market heated up in the lead-up to Christmas. ...Read more

Loans
Mortgage stress reaches 3-year low
Despite mortgage-holders experiencing record levels of comfort, red flags are emerging with financial stress tipped to rise, new research has revealed. ...Read more

Loans
How to reduce your home loan turnaround time
A surge in consumers looking to borrow continues to put pressure on lenders, leading to delays in processing times, research has revealed. ...Read more

Loans
Consumer advocacy groups fight to save safe lending laws
Twenty-two thousand Australians have joined the Senate economics committee hearing to fight against proposed changes to safe lending laws, which are designed to make it easier for consumers to get th...Read more

Loans
Banking industry continues support for struggling Australians
The banking industry has announced that it will continue to support Australian mortgage-holders who have been negatively impacted by the COVID-19 pandemic. ...Read more

Loans
Commbank announces green loans
Australia’s largest bank has announced a new green loan, which home owners can use to buy and install renewable technology in the family home. ...Read more

Loans
‘A disastrous winding back of consumer protections’: Industry group warns
The government’s proposed changes to consumer lending laws will harm Australian consumers and families while hindering the economic recovery it is intended to promote, a consumer advocacy group has ...Read more

Loans
One in two Aussies does not believe banks act in their best interests when refinancing
Australians looking to take advantage of record-low interest rates are unlikely to speak with their bank, but have a high level of trust in mortgage brokers, new research has revealed. ...Read more

Loans
Home lending surge shatters records with $24bn in loans
The total value of loan commitments for investor housing rose 6 per cent month-on-month to reach $5.6 billion in November last year, as the property market heated up in the lead-up to Christmas. ...Read more