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Two-income households risk mortgage stress


mortgage stressA high reliance on two incomes means many households could face mortgage stress, a study claims.

Findings from Roy Morgan Research have revealed more than two-thirds (67.2%) of owner-occupied home loans are held by households with two incomes. The researcher said this could present a risk if one income earner becomes unemployed.

While the study classified 9.3% of dual-income households currently at risk of mortgage stress, Roy Morgan said 34.8% would be at risk if even the non-main income earner were to drop out of the workforce.

“The biggest impact on mortgage stress is likely to be unemployment or a move to increased levels of underemployment. This analysis has shown that the loss of an income in a two income-household has more impact than a doubling of interest rates,” Roy Morgan industry communications director Norman Morris said.

The study classified 705,000 Australians, or 17.4% of mortgage-holders, as being at risk of mortgage stress based on an average interest rate of 5.4%. The study classified 13.1% of mortgage holders as being “extremely at risk”. Roy Morgan said the level of mortgage holders classified “extremely at risk” was “historically favourable”, having declined as interest rates have fallen. But Morris said stress levels were likely to remain high, even with further rate reductions “as this appears to encourage higher house prices and borrowings”.

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