Mortgage stress, rental stress, housing affordability stress: what’s the difference?

‘Mortgage stress’, ‘rental stress’ and ‘housing affordability stress’ are terms often used in the media to describe people experiencing financial strain in the housing system, but what do the terms really mean?

Mortgage stress

Mortgage stress has no one accepted definition but is often described as paying more than 30 per cent of household income in mortgage repayments and associated housing costs.

The ABS Survey of Income and Housing (SIH) limits housing costs to mortgage repayments (including both the interest component and the principal component), rent, property and water rates as well as body corporate fees. Mortgage/loan repayments include those that were ‘primarily to buy, build, add to, or alter the occupied dwelling’.  The SIH doesn’t include costs for repairs, maintenance and dwelling insurance, although these can be significant costs for a household.

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