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Supporting the View that Gen X Faced Greater Mortgage Stress

Published July 6, 2026 at 4:43 AM UTC

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The debate over which generation faced the most significant mortgage stress in Australia has been a topic of contention. However, evidence suggests that Generation X (born approximately between 1965 and 1980) experienced more substantial financial strain than other cohorts. During the Global Financial Crisis (GFC) in 2008, interest payments as a percentage of household income peaked at 7.9% when the cash rate was 7.25%. This period was particularly challenging for Gen X, who were in their prime earning and borrowing years. The subsequent years saw interest repayments averaging 6.6% of household income, placing a significant burden on this generation. Terry Rawnsley, Director of Planning and Infrastructure Economics at KPMG, emphasized that Gen X had a particularly tough period during the GFC and the years following. The substantial increase in loan sizes during this period meant that even with lower interest rates, the absolute amount paid in interest was considerable. For instance, a $400,000 mortgage at a 5% interest rate results in the same interest payments as a $100,000 mortgage at a 17% rate. This escalation in loan sizes has led to a national average home loan of $735,000 for owner-occupiers, with an average variable interest rate of 5.93%, culminating in an average monthly repayment of $4,300. Associate Professor Ben Phillips from the Australian National University noted that while 5.9% may seem modest, it applies to approximately 35% of the population with mortgages—a significantly higher proportion than in the 1980s. He also pointed out that, despite higher repayments, Australia