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Mortgage stress tipped to rise


shutterstock laptop stress man 738x410Nearly a third of Australian households are estimated to be in mortgage stress.

New research from Digital Finance Analytics has claimed more than 921,000 households across Australia are in mortgage stress. According to the firm’s December mortgage stress report, the number of households facing mortgage stress grew from 913,000 in November. The number represents 29.7% of all households.

The research firm also estimated that more than 24,000 households are experiencing severe mortgage stress, up 3,000 from the previous month.

“We estimate that more than 52,000 households risk 30-day default in the next 12 months, similar to last month,” the firm said.

Digital Finance Analytics principal Martin North warned that household debt relative to income was swelling.

How to manage mortgage stress

“The number of households impacted is economically significant, especially as household debt continues to climb to new record levels. Mortgage lending is still growing at three times income. This is not sustainable,” North said.

While DFA said recent stricter lending standards would help new borrowers, the firm claimed that many households currently hold home loans that would not be approved under new lending standards.

“This is a significant sleeping problem, and the risks in the system are higher than many recognise,” the firm said.

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