Australia's national mortgage burden is projected to be heavier in early 2026 than it was during the interest rate peak of the late 1980s, according to an analysis by KPMG. In early 2026, home loan rates averaged 8.3% through the three months to March.

KPMG urban economist Terry Rawnsley said his research was in part a "myth-busting" exercise aimed at rebutting oft-repeated claims that previous generations had it harder when it came to buying and paying off a home. "From this perspective the data tells a pretty clear story," Rawnsley said. "In the past, paying off a home loan has been a source of security, it's increasingly a source of anxiety."

The Reserve Bank's cash rate peaked at 17.5% in 1990, with mortgage rates hitting 17% in mid-1989. In early 1990, interest payments as a share of household income reached 5.7%, with interest on dwellings at 3.4% and interest on consumer debt at 2.3%, according to KPMG analysis. Households in total were dedicating 5.4% of their income to servicing mortgages and consumer debt obligations in early 2026, while 5% of household income was specifically allocated to servicing mortgages.

Rawnsley said the total debt burden figure will push towards 6% once the full impact of this year's three interest rate hikes flow through to borrowing rates. He noted the data he analysed was a combined total of household income and interest payments. "This aggregate number is the best we can look at," Rawnsley said.

Tim Reardon, chief economist at the Housing Industry Association, said housing affordability was at its worst on record stretching back to 1994. "This decline is fairly typical of what we have seen over the past 25 years: you get short periods of price declines followed by longer periods of rapid price growth," Reardon said. "Even a fall of 5-10% in home prices only takes them back to where they were 12 to 18 months ago."