Yes, Australian Mortgage Arrears Are Currently Modest — But the Trend Is Worth Watching
“Mortgage arrears rates are currently modest in Australia”
The argument in brief
The claim that Australian mortgage arrears rates are modest is true. Despite rapid interest rate rises since 2022, the share of housing loans more than 90 days overdue has stayed below 1%, according to both the Reserve Bank of Australia and APRA. That is low by historical standards and well below comparable international markets.
Data: RBA Financial Stability Review / APRA ADI Statistics
Why it spread
Australia has some of the highest household debt levels in the world, and two years of steep rate rises generated real public anxiety. People on both sides of the debate — those worried about a housing crash and those arguing the market is resilient — have reasons to share arrears data. The reassuring numbers appeal to homeowners, investors, and anyone wanting evidence that the system is holding up, while critics of that framing point to rising stress as a warning sign of trouble ahead.
The claim is accurate. Australian mortgage arrears — the share of home loans where borrowers have fallen behind on repayments — remain modest by any reasonable measure, even after one of the fastest interest rate hiking cycles in decades.
The hard numbers back this up. The Reserve Bank of Australia's Financial Stability Review from October 2023 found that 90-plus day arrears on bank housing books sat between 0.5% and 0.8%. APRA's quarterly data on authorised deposit-taking institutions told the same story: non-performing housing loans stayed under 1% of total housing loans throughout 2023. These are not alarming figures.
Ratings agencies agree. S&P Global Ratings reported that arrears of 30 or more days in Australian residential mortgage-backed securities stayed below 1.5% through mid-2023 — low by international standards. Moody's put the same measure at roughly 1.2–1.6%, noting it was slightly up from pandemic-era lows but still well below the historical peak of over 2% and far below comparable markets overseas.
To be fair to the strongest version of any concern here: arrears are rising. The RBA and financial journalists at the Australian Financial Review both flagged an upward trend driven by rate rises. Some households are genuinely under pressure. But a rising trend from a very low base is not the same as a crisis. Strong employment, savings buffers built during the pandemic, and APRA's lending standards have all acted as shock absorbers.
This claim spreads partly as reassurance in a climate of genuine anxiety about Australia's high household debt. Headlines about mortgage stress are common and not wrong — stress and arrears are different things. Stress means households are stretched; arrears mean they have actually missed payments. Keeping that distinction clear matters when reading coverage of the housing market.
Sources
- S&P Global Ratings – RMBS Performance Watch Australia
Australian residential mortgage-backed securities arrears (30+ days) remained below 1.5% through mid-2023, historically low by international standards despite rising interest rates.
- Reserve Bank of Australia – Financial Stability Review, October 2023
The RBA noted that housing loan arrears remained low, with 90+ day arrears on banks' housing books around 0.5–0.8%, supported by strong labour markets and household savings buffers built during the pandemic.
- Australian Prudential Regulation Authority (APRA) – Quarterly ADI Statistics
APRA data showed non-performing housing loans as a share of total housing loans remained under 1% for major authorised deposit-taking institutions through 2023, consistent with historically modest arrears levels.
- Moody's Investors Service – Australian RMBS Arrears Monitor
Moody's reported that Australian prime RMBS 30+ day arrears were approximately 1.2–1.6% in 2023, elevated slightly from pandemic lows but still modest compared to historical peaks above 2% and well below comparable international markets.
- ABC News / Australian Financial Review – Mortgage Stress Reporting 2023
Financial journalists and analysts noted that while arrears were ticking upward due to rate rises, the absolute level remained modest, with banks reporting manageable stress and no systemic deterioration.