Mortgage holders in Victoria, Queensland and Tasmania are set to be hit the hardest by the Reserve Bank’s decision to raise interest rates by 25 basis points to 3.85 per cent this month.
That is according to new research from Roy Morgan, which shows that while Victoria and Tasmania are most at risk of mortgage stress, those in New South Wales have the lowest risk.
The situation is worst in Tasmania with 29.8 per cent of mortgage holders classified as ‘At Risk’, and this will increase 3.8 per cent points to 32.6% if the Reserve Bank (RBA) increases interest rates again in March by another 25 basis points.
In clear second place is Victoria, with 27.2 per cent of mortgage holders classified as ‘At Risk’ and set to increase to 29.9 per cent (up 2.7 per cent points) following another possible RBA interest rate increase.
However, a potential RBA interest rate increase in March will hit hardest in Queensland and would mean 26.8 per cent of mortgage holders ‘At Risk’ – an increase of 3.2 percentage points.
Interestingly, it is mortgage holders in New South Wales that have the lowest level of mortgage stress at only 22.8 per cent of mortgage holders. If the RBA decides to raise interest rates by 25 basis points to 4.1 per cent in March, this will increase by 3 percentage points to 25.8 per cent, which would be lower than every state except Western Australia (25.5 per cent).
Roy Morgan data also predicts the amount of mortgage holders nationwide at risk of mortgage stress could rise past 25 per cent. An interest rate lift of 25 basis points next month would increase the figure to 27.2 per cent. That’s 1,322,000 mortgage holders.
This comes as mortgage stress dropped to a three-year low in December 2025, according to Roy Morgan CEO Michele Levine. But the RBA’s cash rate lift in February and the possibility of further rises ahead, means mortgage stress is swinging back up again.
“A deeper analysis of the data within States shows a consistent trend with mortgage stress higher in the capital cities and set to be more heavily impacted by interest rate rises,” Levine said. “This trend bears out with mortgage stress higher in Sydney than Country NSW, higher in Melbourne than Country Victoria, higher in Perth than Country WA, and higher in Adelaide than Country SA.
“However, there is a glaring exception to this trend with the situation reversed in Queensland – a state with a larger population outside the capital city than within it. In Queensland, mortgage stress is significantly higher in areas outside Brisbane – which includes large regional areas such as the Gold Coast, Sunshine Coast, and North Queensland cities like Cairns and Townsville, than Brisbane.”
Research also reveals the mortgage holders who are “extremely at risk” of mortgage stress, with those in Victoria and Tasmania taking the lead.
Overall, 17.1 per cent of mortgage holders are ‘Extremely At Risk’, and this will increase 2.4 per cent points to 19.5 per cent if the RBA increases interest rates by 25 basis points to 4.1 per cent in March. Or 947,000 mortgage holders.
Once again, Tasmanians are under the most mortgage stress – 22.1 per cent of Tasmanian mortgage holders are ‘Extremely At Risk’, and this is set to increase 2.1 per cent points to 23.2 per cent of mortgage holders in March.
In second place is Victoria with 18.3 per cent of mortgage holders classified as ‘Extremely At Risk’ and set to increase to 20.7 per cent (up 2.4ppts) following another RBA interest rate increase.
Queensland will be hit hardest by another RBA interest rate increase with those ‘Extremely At Risk’ rising from 17.5 per cent currently, up by 3 percentage points to 20.5 per cent of mortgage holders.
Western Australia has clearly the lowest level of those ‘Extremely At Risk’ at only 14.3 per cent. Another interest rate increase will see this rising by 1.1 percentage points to 15.4 per cent – even further below the national average.
“The key takeout from these results is that further interest rate increases are set to be a painful experience for many Australians with almost one-in-four mortgage holders already classified as ‘At Risk’ (24.5 per cent) of mortgage stress, and over one-in-six classified as ‘Extremely At Risk’ (17.1 per cent).”