Highlights

  • Scheduled mortgage repayments were about 10% of aggregate household disposable income at the September Board meeting, near the 2024 peak.
  • Fewer than 2% of owner-occupier borrowers were estimated to be facing a cash flow shortfall.
  • Savings buffers range from just under one year of repayments for the lowest income quintile to almost two years for the highest.
  • A negative equity stress test used by the RBA assumed a 20% fall in housing prices, a hypothetical scenario used to test resilience.

Australian mortgage holders are carrying a repayment burden that is back near the levels seen in 2024, when the previous peak of rate pressure was felt. Data presented to the RBA Board ahead of its September 2026 meeting sets out where households stand: not yet in widespread distress, but under meaningful pressure.

Mortgage Payments as a Share of Income

The minutes of the RBA Board's 29 September 2026 meeting recorded that scheduled mortgage payments were about 10% of household disposable income in aggregate. This figure includes all households, not just those with mortgages, which means the burden on mortgage-holding households is higher when measured on their own income alone.

Bullock gave a similar figure at the media conference, noting they were "back up sort of around 10 per cent" while acknowledging she might not have the figure exactly right. She was clear about the human impact: "Those who have mortgages, yes, this clearly impacts them and it hurts them."

How Many Borrowers Are in Shortfall

Fewer than 2% of owner-occupier borrowers were estimated to be facing a cash flow shortfall at the time of the September meeting. This figure is a point-in-time estimate based on the data available to RBA staff and represents those whose income, after mortgage repayments, is insufficient to cover essential spending.

Savings buffers help cushion borrowers from immediately tipping into shortfall. The Board's data showed that borrowers in the lowest income quintile held savings equal to just under one year of scheduled repayments, while those in the highest quintile had almost two years of buffer.

Housing Prices and Negative Equity

Bullock told the Senate on 28 October that housing prices have fallen in most capital cities. New housing loans have also declined. Despite this, prices remain approximately 50% above early-2020 levels, leaving most owners with substantial equity buffers.

The October 2026 Financial Stability Review noted that most borrowers have positive equity. The Board's minutes referenced a negative equity stress test that assumed a 20% fall in housing prices. This was a hypothetical scenario used to assess resilience, not a forecast. The RBA has also been explicit that monetary policy does not target housing prices.