Where Australia's Mortgage Holders Are Most Stretched
Abstract
Mortgage stress does not spread across a suburb evenly. Within one suburb, the calmest and most stretched pockets can sit a factor of two apart. This paper maps mortgage stress at microburb grain across every populated area of Australia. The measure is plain and well established. A household is in mortgage stress when repayments take 30% or more of its income. For each microburb we read the share of local mortgage holders who pass that line. The national median microburb sits at 29%. In the most stretched pockets more than nine in ten mortgage holders are over the line. In the calmest, as few as one in thirty. The reading is a household-resilience signal. It shows where owners are most exposed to a rate rise or an income shock, and where they are insulated.
What this is. A map of how stretched local mortgage holders are, pocket by pocket. It uses the standard 30% rule that government and lenders use to define stress, so there is no black box. A second, independent model trained on welfare and occupation data agrees with it almost exactly, which tells us the signal is real rather than an artefact of one source.
What this is not. It is not a price forecast and it is not a buy list. A high reading flags a stretched owner base and a need for closer due diligence. It does not promise what a property will cost or return. Our own testing found no reliable link between mortgage stress and later price falls, so we make no such claim here.
Data currency. This is a current reading, our April 2026 figures. It captures the pressure of today's higher mortgage rates, well after the run of rate rises from 2022 to 2024. It is a point-in-time snapshot and will move as rates and prices change, but it reflects conditions as they stand now, not a pre-pandemic count.
Contents
Key Findings
- Nearly half of Australians live in a stretched pocket. In 47% of the country's microburbs, at least three in ten local mortgage holders are in stress. Those pockets are home to roughly half the population.
- Queensland carries the most stretched mortgage base in the country. Across Queensland, 42% of mortgage holders are in stress on a population-weighted basis, against 21% in the ACT and 25% in South Australia.
- One corridor dominates the top of the list: Logan and outer Brisbane. Holmview (Brisbane) reads 93%, with Crestmead and Eagleby (both Brisbane) at 89%. In these pockets almost every mortgage holder is over the stress line.
- The number you choose inside a suburb matters. Caboolture (Brisbane) reads 79% overall, but its calmest pocket sits at 34% and its most stretched at 87%. The street decides as much as the suburb.
- The calmest suburbs are calm right across. Nedlands (Perth) reads 3%, North Adelaide 5%, and Castlecrag (Sydney) 9%. Their owner bases are insulated from rate moves.
- Two independent methods draw the same map. A separate model that predicts personal insolvency from welfare reliance and occupation mix, inputs with no direct overlap with the stress ratio, ranks suburbs almost identically. The rank agreement is 0.999. When two unrelated methods agree this closely, the geography is trustworthy.
How To Read The Number
The 30% rule is the standard definition of mortgage stress used by government and lenders. A household crosses into stress when its mortgage repayments reach 30% of household income. Our reading for each microburb is the share of local mortgage holders who sit at or above that line. A reading of 80% means four in five local mortgage holders are stretched past it. A reading of 5% means almost none are.
The figure is built from income and mortgage-cost data at the finest geography Australia publishes, calculated for 2026 and read for every populated microburb in the country. Because it rests on a single, public rule, it is easy to interpret and sense-check. A reader, a buyers agent, or a regulator can check it. That transparency is the point. The number does not depend on a private model or a black box.
Results: The National Picture
Mortgage stress by state
The share of mortgage holders in stress, weighted by population, varies widely by state. Queensland leads, driven by its fast-growing outer corridors where prices ran ahead of local incomes.
| State | Mortgage holders in stress | Residents covered |
|---|---|---|
| Queensland | 42% | 5.1 million |
| New South Wales | 32% | 8.1 million |
| Tasmania | 31% | 0.6 million |
| Victoria | 30% | 6.5 million |
| Western Australia | 28% | 2.6 million |
| Northern Territory | 27% | 0.2 million |
| South Australia | 25% | 1.8 million |
| ACT | 21% | 0.5 million |
Population-weighted share of local mortgage holders in stress, 2026 figures. Capital growth impact: none claimed. A stretched owner base is a downside-risk and resilience signal, not a measured price effect.
The most stretched suburbs
| # | Suburb | SUA | State | Mortgage holders in stress | Within-suburb range | Insolvency / 10k (validation) |
|---|---|---|---|---|---|---|
| 1 | Holmview | Brisbane | QLD | 93% | 80% to 100% | 9.9 |
| 2 | Crestmead | Brisbane | QLD | 89% | 81% to 96% | 9.6 |
| 3 | Eagleby | Brisbane | QLD | 89% | 78% to 95% | 9.5 |
| 4 | Marsden | Brisbane | QLD | 89% | 85% to 93% | 9.5 |
| 5 | Morayfield | Brisbane | QLD | 85% | 69% to 94% | 9.2 |
| 6 | Redbank Plains | Brisbane | QLD | 85% | 77% to 91% | 9.2 |
| 7 | Caboolture | Brisbane | QLD | 79% | 34% to 87% | 8.6 |
| 8 | Mount Druitt | Sydney | NSW | 72% | 38% to 78% | 8.0 |
Suburbs with at least 3,000 residents, ranked by share of mortgage holders in stress. Within-suburb range is the spread across the suburb's microburbs. The insolvency column is an independent cross-check, not part of the ranking. See the full picture for any suburb in your suburb report.
The calmest suburbs
| Suburb | SUA | State | Mortgage holders in stress | Insolvency / 10k (validation) |
|---|---|---|---|---|
| Nedlands | Perth | WA | 3% | 1.7 |
| Dalkeith | Perth | WA | 4% | 1.9 |
| City Beach | Perth | WA | 4% | 1.8 |
| North Adelaide | Adelaide | SA | 5% | 1.9 |
| Castlecrag | Sydney | NSW | 9% | 2.2 |
The calmest suburbs cluster in established, higher-income areas where incomes comfortably cover the mortgage. Capital growth impact: none claimed. A resilient owner base weathers rate moves better, which is a stability signal rather than a measured return.
Reading It Within A Single Suburb
The value of microburb grain shows up inside a suburb, where the average hides the spread. Three suburbs make the point.
In Caboolture (Brisbane), the suburb-wide reading is 79%, but its pockets run from 34% to 87%. A buyer who treats Caboolture as one number misses that its calmest streets have less than half the stress of its most stretched ones.
In Mount Druitt (Sydney), the spread runs from 38% to 78%. The suburb reads 72% overall, yet a careful buyer can still find pockets where well under half of mortgage holders are stretched.
In Castlecrag (Sydney), the spread is tiny, from 6% to 13%. The whole suburb reads as uniformly calm, which is itself useful for an owner weighing how resilient their holding is.
Independent Validation
A fair question about any single metric is whether it is measuring something real. To test that, we compare the 30% stress reading against a separate model that predicts personal insolvency. That model is trained on different inputs, chiefly welfare reliance, occupation mix, and local spending patterns, with no direct use of the mortgage-to-income ratio. If the two disagreed, we would treat the stress reading with caution.
They do not disagree. Across more than 14,000 suburbs, the two rankings line up almost perfectly, with a rank agreement of 0.999. The most stretched suburbs on the stress reading, the Logan and outer Brisbane corridor, are also the highest on predicted insolvency, near ten filings per 10,000 residents. The calmest, the Perth and Adelaide blue-chip suburbs, sit near the floor of both measures. Two methods built from unrelated data drawing the same map is strong evidence the signal is genuine.
The two measures agree because both ultimately reflect how far local incomes stretch to cover housing. We do not present them as independent confirmations of a price effect. They confirm the geography of household pressure, nothing more.
What This Does And Does Not Say About Prices
It is tempting to read high mortgage stress as a sign that prices are about to fall. We tested that and the data does not support it. The most stretched suburbs are overwhelmingly outer-suburban growth corridors, where prices have risen fast relative to local incomes. High stress there is a symptom of prices outrunning pay, not a signal of a market about to drop. Stress and recent price growth have tended to move together, the opposite of the simple story.
There is a narrower, more honest relationship. Within a single state, suburbs with higher stress show a modestly higher rate of homes resold at a loss, strongest in New South Wales and Victoria and absent in the recently booming Western Australian and South Australian markets. The effect is real but small. Stress explains only a few percent of the variation in loss-making resales once the state is accounted for.
The honest conclusion. Mortgage stress is a measure of household resilience, not a price-timing tool. A stretched owner base raises the downside risk in a downturn and the exposure to rate rises. It does not tell you a suburb is cheap or about to fall. No effect on capital growth is claimed.
Defence Against Criticism
"Stress is not the same as a forced sale"
Correct, and we do not claim it is. Mortgage stress measures how stretched owners are, not how many will sell under pressure. A stretched owner base means thinner resilience to rate moves and income shocks. The implication is about risk and exposure, not a prediction of any one sale.
"This is just income in disguise"
Largely true, and that is a strength. The 30% rule is meant to capture the gap between local incomes and local mortgage costs. That it follows a single, public rule is what makes it easy to interpret. The separate insolvency model, built from welfare and occupation data, then agrees with it, which shows the signal is not an accident of one calculation.
"Is this current?"
Yes. This is our April 2026 reading, refreshed this year. It already reflects the higher rates that followed the 2022 to 2024 tightening, so it shows the squeeze as it stands now, not a pre-pandemic snapshot. A point-in-time reading still moves as rates and prices change, which is why we refresh it.
Limitations
- It is a point-in-time reading. The figures are calculated for 2026 and will move as rates and prices change. Treat them as the current picture, refreshed periodically, not a live feed.
- No validated price effect. We have not found a reliable link between mortgage stress and later price falls. No effect on capital growth is claimed.
- No live market signals. Listing volumes, price cuts, days on market, and auction results are not folded in. They would give a more direct read on current seller pressure.
- Stress is not destiny. A high reading does not mean an area is in decline, and a low reading does not guarantee growth. Many stretched corridors are simply fast-growing areas where prices ran ahead of incomes.
Conclusion
Mortgage stress in Australia concentrates in specific pockets, not just specific suburbs. The Logan and outer Brisbane corridor carries the most stretched mortgage base in the country, where almost every mortgage holder is over the 30% line. At the other end, the blue-chip suburbs of Perth, Adelaide, and Sydney's Lower North Shore read as uniformly calm. A second, independent method built from welfare and occupation data draws the same map, which gives us confidence the geography is real.
The practical use is the same for every reader. Read the stress reading before you act. Use it to gauge how resilient a suburb's owner base is, and to find the calmer pockets inside a stretched suburb. The gap between the calmest and most stretched microburbs inside one suburb can be a factor of two, and that gap is where careful buyers manage their risk.