Invest
Home loan arrears set to rise, RBA warns
As job losses continue to rise, Aussies with only a small buffer between their savings and their mortgage repayments risk their mortgage going into arrears, the central bank has warned.
Home loan arrears set to rise, RBA warns
As job losses continue to rise, Aussies with only a small buffer between their savings and their mortgage repayments risk their mortgage going into arrears, the central bank has warned.

In its April 2020 Financial Stability Review, the Reserve Bank of Australia (RBA) reiterated its stance that the level of household debt and higher house prices are enduring risks for the Australian financial system.
While some households may be able to draw on significant financial buffers, including substantial mortgage prepayments, the RBA said many highly indebted households would have only small buffers.
These households would be more vulnerable to lost income.
“Repayment deferrals ‘holidays’ being offered by the banks and the government’s recently announced wage subsidy should both help avoid large increases in arrears,” the RBA said in its review.

Most households entered this challenging period in good financial health, with surveys showing most households had enough liquid assets to cover basic living expenses and current obligations, such as mortgage and rent payments, for three months.
Households with mortgage debt usually had sizable liquidity and/or equity buffers. Among these borrowers, over half of these loans had enough payments to service their loan repayments for at least three months.
However, the RBA stated there were certain segments of vulnerability before the pandemic, with some households having less liquidity to manage reductions in income.
“Surveys indicate that about one in five households only have enough liquid assets to get from one pay period to the next,” the RBA warned.
“These liquidity-constrained households are typically young, twice as likely to be renting and twice as vulnerable to unemployment compared with other households.”
Among households with mortgage debt, just under a third of mortgages have less than one month of prepayments, and about half of these are particularly vulnerable to a sudden and sharp drop in income.
Renters also feel the pinch
More than one-third of renting households typically report in surveys they have experienced financial stress in a given year, such as difficulty paying bills or skipping meals.
The most vulnerable are those facing unemployment risk such as casual workers and those in industries most affected by the coronavirus containment measures, such as accommodation and hospitality services.
These workers are more likely to rent and more likely to have liquidity constraints.
However, increasing financial stress among renters does not pose direct risks to the banking sector because these households usually hold little debt.
“But they pose indirect risks if they have trouble paying rent and their landlords in turn have trouble making their own debt repayments,” the RBA said.
About the author

About the author


Property
First‑home buyers now anchor Australia’s mortgage growth — but the risk maths is changing
Great Southern Bank’s revelation that nearly one in three of its new mortgages went to first‑home buyers is not an outlier. It is the leading edge of a broader market realignment powered by government ...Read more

Property
Home guarantee scheme shake-up challenges Australia’s housing market players
From 1 October 2025, the expanded Home Guarantee Scheme (HGS) materially widens what first-home buyers can purchase and where. By sharply lifting price caps and relaxing eligibility settings, the ...Read more

Property
GSB’s first‑home buyer play: turning policy tailwinds into market share
Great Southern Bank’s latest results show that nearly one in three of its new mortgages now go to first‑home buyers—evidence of a fast‑moving market reshaped by government guarantees, easing rates and ...Read more

Property
Why investors are fleeing and renters are scrambling in Australia's housing maze
Australia’s rental market is tightening even as individual landlords sell down. New data points to a multi‑year investor retreat tied to higher holding costs and regulatory uncertainty, while prices ...Read more

Property
Australia's 5% deposit guarantee: Unlocking gains while balancing risks in the market share race
Can a bigger government guarantee fix housing access without fuelling prices? Australia is about to find out. The Albanese government’s expanded 5% deposit pathway aims to help 70,000 buyers, remove ...Read more

Property
Australia's bold move the 5% deposit scheme shaking up the housing market
Can a government guarantee replace lenders mortgage insurance without inflating prices or risk? Canberra’s accelerated 5% deposit scheme is a bold demand-side nudge in a supply‑constrained marketRead more

Property
When rates drop but stress sticks: exploring Australia's mortgage arrears dilemma
Headline numbers suggest arrears ease as rates come down. The reality in Australia is messier: broad measures dipped into mid‑2025, yet severe delinquencies and non‑bank portfolios remain under ...Read more

Property
Property advice goes rogue as risks and opportunities knock on every door
A warning from the Property Investors Council of Australia has put a spotlight on the surge of unlicensed financial advice around property strategies. This is no niche compliance issue—it’s a ...Read more

Property
First‑home buyers now anchor Australia’s mortgage growth — but the risk maths is changing
Great Southern Bank’s revelation that nearly one in three of its new mortgages went to first‑home buyers is not an outlier. It is the leading edge of a broader market realignment powered by government ...Read more

Property
Home guarantee scheme shake-up challenges Australia’s housing market players
From 1 October 2025, the expanded Home Guarantee Scheme (HGS) materially widens what first-home buyers can purchase and where. By sharply lifting price caps and relaxing eligibility settings, the ...Read more

Property
GSB’s first‑home buyer play: turning policy tailwinds into market share
Great Southern Bank’s latest results show that nearly one in three of its new mortgages now go to first‑home buyers—evidence of a fast‑moving market reshaped by government guarantees, easing rates and ...Read more

Property
Why investors are fleeing and renters are scrambling in Australia's housing maze
Australia’s rental market is tightening even as individual landlords sell down. New data points to a multi‑year investor retreat tied to higher holding costs and regulatory uncertainty, while prices ...Read more

Property
Australia's 5% deposit guarantee: Unlocking gains while balancing risks in the market share race
Can a bigger government guarantee fix housing access without fuelling prices? Australia is about to find out. The Albanese government’s expanded 5% deposit pathway aims to help 70,000 buyers, remove ...Read more

Property
Australia's bold move the 5% deposit scheme shaking up the housing market
Can a government guarantee replace lenders mortgage insurance without inflating prices or risk? Canberra’s accelerated 5% deposit scheme is a bold demand-side nudge in a supply‑constrained marketRead more

Property
When rates drop but stress sticks: exploring Australia's mortgage arrears dilemma
Headline numbers suggest arrears ease as rates come down. The reality in Australia is messier: broad measures dipped into mid‑2025, yet severe delinquencies and non‑bank portfolios remain under ...Read more

Property
Property advice goes rogue as risks and opportunities knock on every door
A warning from the Property Investors Council of Australia has put a spotlight on the surge of unlicensed financial advice around property strategies. This is no niche compliance issue—it’s a ...Read more