Zombie mortgages eat banker’s brains


Borrowers in Australia with “zombie mortgages” are failing to make their mortgage payments, placing $270 billion in home loans at risk of default or severe stress in the coming year.

Barrenjoey banking analyst Jon Mott warned that the rising cost of servicing loans issued during the COVID-19 mortgage boom might hit the major banks hard as the employment outlook worsens and the cost of living rises.

“We believe many borrowers are entering a period of severe stress,” Mr. Mott said, “with mortgage rates now well through the serviceability buffers used during the pandemic boom.”

The full text of this article is available to MacroBusiness subscribers

$1 for your first month, then:
Cancel at any time through our billing provider, Stripe
About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.