RBA warns two factors risk increasing number of Australians caught in mortgage struggle

The Reserve Bank estimates about 5% of owner-occupiers on variable-rate mortgages have incomes that fall short and warns more could struggle if interest rates remain high. Photograph: Andrew Merry/Getty Images

The number of Australians in financial stress is “small” but will be “magnified” if the economy slows more than expected or interest rates linger higher for longer, the Reserve Bank has warned.

While overseas challenges – including a faltering Chinese economy – could also upset forecasts, Australia’s financial system continued “to display a high level of resilience”, the bank said in its semi-annual financial stability review.