Mortgage arrears worsening as unemployment hits 5-year high
Australia's banking regulator warned that mortgage arrears are rising with unemployment at 4.7%, a five-year high, and another interest rate rise looming.
The chair of the Australian Prudential Regulation Authority, John Lonsdale, told a Senate hearing that the regulator is watching employment trends closely as more borrowers fall behind. Arrears of at least 30 days are ticking upward across all types of borrowers.
The problem is sharpening: four interest rate rises have already hit this year, and a fifth is expected next week, taking the Reserve Bank cash rate to 4.85%, the highest in 18 years. More first homebuyers are entering the market with just 5% deposits, meaning banks hold 95% of the property value.
Banks say customers are reaching out earlier to discuss repayment options, helping manage the stress, but the underlying pressure is clearly building.
- 4.7 percent
- Unemployment rate
- 95 percent
- Bank equity share
- 4.85 percent
- New cash rate target
- 18 years
- Years since last 4.85% rate
Why it mattersRising mortgage arrears show growing strain on households as unemployment reaches a five-year high and interest rates hit 18-year peaks.
AustraliaDirectly affects Australian borrowers' finances, household stress, and bank stability; signals the RBA's rate cycle is causing real hardship.
✓ Claims checked against the source and corrected before publish. checked 2 h ago
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