The research from CHOICE has named Tasmania as the hardest-hit state by mortgage stress, with 55.79 per cent of households in financial distress.
Launceston has topped the list of state regions for most households in crisis, with 4,735 in stress.
Hobart suburbs Bellerive, Howrah and surrounding under the postcode 7018 followed, with 3,123 households in mortgage stress, with Austins Ferry and surrounds coming in third, with a total of 1,898.
CHOICE banking policy lead Patrick Veyret commented that financial counsellors have reported that many people will often forgo spending on essentials such as utilities and food before they default on their mortgage.
“Tasmania was once one of the most affordable places in the country to live, and now communities like Launceston are living on the brink,” Mr Veyret said.
“While the early signs of Australia’s economic recovery are promising, many families are faced with underemployment, stagnant wage growth and government support being wound back.”
CHOICE has also released data on South Australia and Queensland, revealing their top 10 suburbs in mortgage stress.
Paralowie and surrounding suburbs in north Adelaide topped its state for postcode with most households in mortgage stress, with its total of more than 5,700.
Golden Grove and Greenwith, in the north-east of Adelaide, followed with 3,350 households.
In Queensland, regional city Toowoomba had the highest total for its state, at 9,693. Toowoomba ranked fourth on the national list for postcodes with the most households in mortgage stress.
Mr Veyret noted that rural and regional areas in Queensland have been the hardest hit, with the top 10 postcodes including Toowoomba, Ipswich, Mackay and Cairns.
“The impacts of international and state travel restrictions in tourism-focused towns, such as Cairns and Mackay, have placed a serious strain on household finances,” he said.
CHOICE has launched the research as it is pushing against the government’s planned repeals to the responsible lending obligations, under the National Consumer Credit Protections Act 2009.
One Nation leader Pauline Hanson and independent senator Rex Patrick have also indicated they will not support the bill when it is voted on in the Senate in mid-June.
Mr Veyret noted that the royal commission recommended the laws be enforced, not dismantled, arguing lenders “routinely broke safe lending laws and trapped people into unaffordable loans”.
“Axing safe lending would be disastrous for the Tasmanian community and economy. People across the state are already doing it tough, they don’t need to be burdened with more reckless bank lending,” Mr Veyret said.
CHOICE is among more than 39,000 people and 125 organisations that have signed an open letter calling on the government to retain the responsible lending obligations in their current state.
Sarah Simpkins is the news editor across Mortgage Business and The Adviser.
Previously, she reported on banking, financial services and wealth for InvestorDaily and ifa.