Repayment strain is gathering pace, with regional borrowers and middle-aged households emerging as particular hotspots.
Mortgage repayment strain grew more than three times as fast in the first half of 2026 as a year earlier, according to data and technology company Experian, as households grapple with higher rates and competing living costs.
Its Housing Pressure Report found that the number of home loan accounts showing strain increased 7.3 per cent over the six months, compared with 2.3 per cent in the corresponding period of 2025.
By June, 1.8 per cent of accounts displayed signs of strain, measured through indicators including arrears, hardship arrangements, and loan variations.
The findings come as the Reserve Bank’s October Financial Stability Review described borrowers as resilient overall, with housing arrears remaining low despite increasing slightly this year.
Experian’s national survey, conducted in early spring following three cash rate increases earlier in 2026, nevertheless found 55 per cent of respondents reported mortgage repayments exerting a fair amount or great deal of financial pressure.
Pressure hotspots emerge
Borrowers aged 35–44 recorded the fastest increase in repayment strain, up 11.8 per cent year to date, while those aged 45–54 had strain levels around 13.6 per cent above the national average in June.
Interest-rate changes were the main explanation for changed repayments among 34.5 per cent of respondents, rising to 47.5 per cent among 35- to 44-year-olds and 45.5 per cent among 45- to 54-year-olds.
Younger respondents reported the greatest mortgage pressure, with 73.5 per cent of 18- to 24-year-olds and 72.3 per cent of 25- to 34-year-olds stating that repayments placed a fair amount or great deal of pressure on their finances.
Regional accounts were around 10.5 per cent more likely than the national average to show strain, while capital-city accounts were 3.5 per cent below it.
Experian said that Greater Melbourne and regional Victoria had the highest levels among areas analysed nationwide.
Experian Australia and New Zealand head of data science Barrett Hasseldine said geographical and demographic differences could help lenders recognise emerging customer difficulties sooner.
“Housing pressure isn’t showing up evenly across Australia; national averages can mask important differences between locations, life stages and borrower groups,” he said.
“The strongest signal from the data is that the Australians reporting the greatest repayment pressure due to rate rises are often the same groups showing rising strain in credit performance. That may provide lenders with additional insight to help identify changing circumstances earlier and support customers appropriately.”
New borrowers also carried greater predicted default risk, with Experian’s June-quarter bureau data putting their risk 35 per cent above the average home loan borrower’s.
Household buffers under pressure
Groceries ranked among the biggest household financial pressures for 55.4 per cent of respondents, ahead of electricity, gas or water at 45.8 per cent and rent or mortgage repayments at 45.4 per cent.
Households were responding by reducing dining out and takeaway spending, cited by 43 per cent, while 32.2 per cent were cutting back on groceries.
Experian’s spending data also showed home buyer spending increased just 2.2 per cent annually in the June quarter, against 10.4 per cent among renters.
Meanwhile, 20.9 per cent of respondents regularly or sometimes relied on savings or credit to cover a typical month, highlighting the financial juggling already occurring before any further repayment increase.
Some 42.4 per cent lacked confidence they could withstand a further 10 per cent repayment rise without reducing essential spending or taking on additional debt.
Separately, 31.9 per cent said they had no plans to purchase a home to live in for the foreseeable future.
Hasseldine said combining repayment performance with hardship and behavioural information could give lenders and other consumer-facing businesses a more complete understanding of changing financial circumstances.
“Understanding housing pressure requires more than a single metric. When repayment trends, hardship indicators and behavioural signals are viewed together, lenders and consumer-facing organisations can build a broader picture of changing customer circumstances earlier and respond in a way that better reflects a consumer’s situation,” he said.
[Related: ‘Nightmare’: RBA’s inflation warning puts another hike in play]
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