Subject: Mortgage stress and negative equity confronts first home buyers

⚡️ Highlights:

1. Roy Morgan's latest mortgage stress report shows that the risk of mortgage stress decreased to its lowest in three years in January 2026, with 23.9% of mortgage holders at risk.

2. The Reserve Bank of Australia (RBA) increased the official cash rate by 0.25% in February, with expectations for more hikes in 2026, potentially leading to increased mortgage stress.

3. If the RBA were to hike two more times in 2026, the official cash rate would return to its recent peak of 4.35%, resulting in a 0.75% increase in the discount variable mortgage rate.

4. Average new mortgage size in Australia was $736,000 in December quarter of 2026, with three 0.25% rate increases implying a cumulative $353 increase in monthly mortgage repayments.

5. Recent first-home buyers who borrowed heavily, especially in Sydney and Melbourne, may face increased mortgage stress and negative equity due to potential price falls in these markets.

✍️ Leith van Onselen | Full Article

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