Thousands of Aussies could risk losing their homes amid loan default fears for mortgage holders

By CAITLIN POWELL - NEWS REPORTER Published: 02:28, 8 August 2026 | Updated: 02:29, 8 August 2026 Thousands of Australian homeowners are at risk of defaulting on loans, according to new data, as mortgage holders await the Reserve Bank's next call on interest rates. A study by Digital Finance Analytics (DFA) for the comparison site OurTop10 found the number of households in trouble jumped 18 per cent across the country over the last three months. The research highlighted significant risk for four key states and territories.  At least 9,500 households in Queensland experienced negative cash flow during the three-month period, the second-highest net jump in the country aside from Western Australia. DFA found 611,311 owners in Victoria were trying to keep their homes as of July after three Reserve Bank of Australia (RBA) hikes - a rise from 536,984 in January. The report revealed New South Wales also saw a 25 per cent hike in mortgage default risk during the period. DFA director Martin North told realestate.com.au the pressure was most acute for Australians who had bought a home in the last few years.  He said many had spent their savings as house prices rose until they have now reached a 'tipping point'. Thousands of Australian homeowners are at risk of defaulting on loans, according to a study by Digital Finance Analytics (DFA) for the comparison site OurTop10 (file image) DFA director Martin North (pictured) said the pressure was most acute for Australians who had bought a homes in the last few years 'This is more about time in cash flow stress than anything else,' Mr North said. 'More households are net monthly underwater… Banks have been actively intervening – through hardship schemes, interest only and refinance schemes – to avoid registering a default. 'However, despite this, some segments, including those with bigger loans, and those funded by small business, are emerging problems. 'We are seeing more hotspots now, and this looks more serious because there is no short-term exit from the current adverse economic settings.' OurTop10 Director Mansour Soltani also highlighted that the stress for homeowners is no longer limited to a few capital cities, but metro areas across Australia. 'What's particularly notable is that mortgage stress is no longer just a Sydney and Melbourne story,' he said after the site published its mortgage stress report in July. 'Perth recorded the largest quarterly increase in stressed households. 'Hobart produced the biggest postcode-level jump in the country, and Canberra accounted for three of the nation's 10 fastest annual increases.' It comes as mortgage holders await the result of the Reserve Bank's next meeting on August 10 and 11 (Pictured, Reserve Bank of Australia (RBA) Governor Michele Bullock) Mr North said at the time that the increased mortgage stress would be a 'long, difficult episode' rather than a quick turnaround.  'The latest from our rolling 52,000 household surveys revealed that more households are under financial pressure, whether renting or holding a mortgage,' he said.  'Recent hikes in interest rates, following the RBA decisions, and higher inflation are compounding the pressure, which we measure in cash flow terms. 'Households need to understand their cash flows, prioritise their spending, and seek help from debt counselling services such as the National Debt Helpline, who recently said they have never seen so many requests for help from households in regular work.' Figures released on July 29 revealed headline inflation for June fell from four per cent to 3.8 per cent, the lowest level since the start of the US-Iran war in February. Trimmed mean inflation, the preferred measure for the RBA, remained steady at 3.6 per cent, below the central bank's prediction of 3.8 per cent. The data has eased fears of the central bank lifting interest rates again when its board next meets on August 10 and 11. The RBA has increased interest rates to 4.35 per cent after three hikes so far in 2026. But the bank's chief economist and assistant governor Sarah Hunter would not be drawn on what the bank's likely outcome would be at its next rates meeting. 'I'm not going to speculate on the meeting,' she said, speaking after the inflation figures were released. 'Some of those domestic components in (inflation figures) were actually pretty much what we expected to see. But the markets are pricing moves all the time.'