Around 1 in 5 Australian borrowers are under mortgage stress depsite historically low interest rates, and new research shows this trend is set to stick around.

According to a recent Roy Morgan analysis, around 18.4% of Australian households are currently under mortgage stress.

Unsurprisingly, lowest-income households still face the highest mortgage stress while mortgage risk, or the tendency of a borrower to default, has climbed to 83.2% for households earning under $60,000 per year.

Despite current record-low interest rates, mortgage stress is set to remain high, as income levels are expected to stagnate.

The report, State of the Nation, revealed that mortgage stress is highest in Tasmania and South Australia where the unemployment figures stand at 6.5% and 6.9%, respectively, above the national average of 5.7%. Mortgage stress is also more significantly felt in regional households than in the cities.

Mortgage stress was at a previous high in 2008 to 2009 when Australians were beset with high interest rates – around double the rate mortgage holders are paying now – and bubble-like price growth.

Yet according to the research, interest rates would have to more than double in order to match the impact of a loss of income on housing stress.

Whilst low income earners remain at risk of default, low interest rates appear to be counter-balancing the default rate more broadly across all mortgage holders.

Further interest rate cuts are forecast to the now historically low cash rate of 1.50%, which should aid in reducing mortgage stress – but only if lenders actually pass the reduction on to consumer.