Speaking in Canberra two weeks before the September rate rise, Assistant Governor Sarah Hunter offered a relatively reassuring view of the average mortgage holder, while acknowledging that many Australians are doing it tough.

In a year of four rate rises, upbeat language from the Reserve Bank of Australia (RBA) stands out. So when Assistant Governor (Economic) Sarah Hunter described the typical mortgage household in positive terms at the Regions Rising summit in Canberra on 14 September 2026, the remark stood out.

"the average household, actually, with a mortgage, for example, looks pretty well-placed as well", she said.

Hunter paired that assessment with an important caveat: "for many members of the community, it's a tough time". Read together, the two comments capture a tension that runs through much of the RBA's recent commentary on households. On average, balance sheets look sound. Beneath the average, the experience varies widely.

The timing

Hunter spoke at a particular point in the cycle. On 14 September, the cash rate target stood at 4.35 per cent, after three increases earlier in 2026. The Monetary Policy Board had held at that level in August, judging policy "sufficiently restrictive" while remaining "alert to the upside risks to the inflation outlook and being ready to act should they materialise."

Fifteen days later, on 29 September, the Board raised the cash rate by 25 basis points to 4.60 per cent, effective 30 September, bringing total tightening in 2026 to 100 basis points. Hunter's "pretty well-placed" assessment therefore predates the most recent increase. The available record does not show whether she has updated that view since.

Her remarks also foreshadowed the reasoning behind the September move. "we do think the risks to inflation right now are skewed to the upside", she said. Two weeks later, the Board's statement said some of those upside risks had materialised, including further disruption to global oil supply from the Middle East conflict and strong AI-related demand pushing up technology-goods prices.

What supports the upbeat read

Hunter's comment on the average household is consistent with several findings in the RBA's October 2026 Financial Stability Review, released on 1 October:

  • The share of variable-rate owner-occupiers with a cash-flow shortfall "remains relatively low at around 2 per cent", and most in shortfall have savings to cover it for at least six months.
  • The share of borrowers in severe stress "will remain well below its 2024 peak".
  • Negative equity is currently below 1 per cent of borrowers.
  • Real household disposable income per capita declined slightly over the first half of 2026 but remains higher than its 2023 and 2024 averages.
  • The share of high loan-to-valuation lending, while up since the expansion of the Government's 5% Deposit Scheme, "remains low overall".

Governor Michele Bullock pointed to another source of resilience at her 29 September media conference: "a lot of people have a mortgage, and then they have an offset account, which sits in the background."

The jobs market has also helped. Bullock noted that over a million jobs have been created in recent years, and told a parliamentary committee on 18 September that "The unemployment rate – at 4.5 per cent – is low by historical standards." By 29 September she cited 4.6 per cent.

Why "average" is doing a lot of work

The word "average" matters. An average mortgage household that looks well placed can coexist with a meaningful number of households under real strain, as Hunter's own caveat recognised.

Several signals point to that strain. Assistant Governor (Financial Markets) Christopher Kent said in August that "Scheduled mortgage payments have risen and are now close to their 2024 peak as a share of household disposable income." Bullock acknowledged on 29 September that for those with mortgages, higher rates mean "they've got less cash flow, and they've got less money to spend on things."

Cost-of-living pressures extend beyond mortgages. Headline CPI inflation was 4.0 per cent over the year to August 2026, and underlying inflation was, in Bullock's words, "about 3.5 per cent for the past six months", with the trimmed mean at 3.6 per cent in the June quarter. Deputy Governor Andrew Hauser said on 8 September that "People are furious about inflation."

The regional lens

Hunter's audience was regional, and much of what she said reflected that. Her observations included:

  1. Housing: "house prices in the regions have not declined as much on average as they have in the bigger cities". On the wider housing story, she said: "We know interest rates are part of that story. We don't think that's the whole story."
  2. Labour: "the availability of labour in the regions is more challenging than it is in the cities".
  3. Fuel: "the importance of fuel, and particularly diesel to the regional economy, we don't underestimate that". Bullock later observed that "fuel prices, fertiliser prices, transport prices, all these things now are permanently higher."
  4. Business conditions: Hunter noted that construction has higher business closure rates, though she said there were no signs of systemic stress. The Financial Stability Review similarly found company insolvencies "around their longer-run average" but elevated in hospitality and construction.

For regional mortgage holders, smaller house price declines may mean firmer equity positions, while fuel costs and labour shortages weigh on the broader economy. Hunter's emphasis on diesel is also a reminder that the fuel shock does not fall evenly; the Board's September statement noted higher fuel prices partly passing through to other goods and services. The material cited here does not provide a separate regional figure for mortgage stress.

The bottom line

Hunter's "pretty well-placed" verdict on the average mortgage household is consistent with the RBA's own stability data: low cash-flow shortfall rates, savings buffers and minimal negative equity. But she delivered it alongside an acknowledgement that "it's a tough time" for many, and before the Board's fourth rate rise of 2026. The averages describe a household sector that is broadly coping; they do not describe every household, and the RBA's own officials have been careful to say so.

Hunter said the RBA's next forecast update is in November. In the meantime, the September minutes are due on 13 October and the September CPI on 28 October. The Board's next decision is at 2.30 pm on 3 November; Bullock has said she will not give forward guidance.