Australian Homeowners Face Rising Mortgage Stress After Rate Hikes

Thousands of Australian homeowners are at risk of defaulting on their loans due to mortgage stress caused by recent interest rate hikes, according to a study by Digital Finance Analytics (DFA) for the comparison site OurTop10.

The DFA report found that the number of households in trouble jumped 18% across the country over the last three months, with at least 9,500 households in Queensland experiencing negative cash flow during this period.

Victoria saw a significant increase in mortgage default risk, with 611,311 owners trying to keep their homes as of July after three Reserve Bank of Australia (RBA) hikes. New South Wales also experienced a 25% hike in mortgage default risk during the same period.

DFA director Martin North stated that many homeowners who bought their homes in the last few years have spent their savings on rising house prices, reaching a 'tipping point' and putting them at risk of defaulting on their loans.