Unemployed Australians owe billions of dollars on their mortgages. As the job market worsens, it's uncertain when they'll be able to pay it back.

Australian mortgage holders are increasingly reliant on JobSeeker payments. (Tim Graham, Getty Images)
  • The Commonwealth Bank reported its full financial year figures on Wednesday, revealing a broader picture of the Australian mortgage market.
  • According to CBA’s figures, 8% of mortgages, amounting to $48 billion, have been frozen alongside 15% of business loans.
  • 14% of mortgage borrowers who have deferred repayments are receiving JobSeeker, suggesting a high level of unemployment amongst homeowners unable to pay back their debts.
  • Visit Business Insider Australia’s homepage for more stories.

When it comes to how Australians are faring financially, there’s perhaps no better bellwether than the Commonwealth Bank of Australia (CBA).

It is the nation’s largest bank, after all, boasting upwards of 17 million customers – many of whom were scooped up by CBA’s government-sanctioned, monopolised school program Dollarmites.

Unsurprisingly, it also holds the lion’s share of Australian mortgage debt — nearly $450 billion worth at last count.

The bank’s financial year results, announced on Wednesday, then provide a fairly reliable picture of the nation’s households and the economy’s health.

The bottom line? Things have certainly looked better.

Customers have frozen repayments on 8% of those mortgages – to the tune of $48 billion – along with 15% of all Commonwealth Bank business loans.

While less than desirable, it’s still a far sight better than some of CBA’s bigger rivals. But there are a couple of other important stats buried in the report which shine a light on just how important government support has become during the pandemic.

Of those mortgage deferrals, 14% are receiving JobSeeker payments. It suggests that one in seven Australians who can’t pay back their home loan have lost their job. In total, it would suggest unemployed CBA customers owe the bank more than $6 billion.

Extrapolated across all banks and lenders, it’s a troubling diagnostic.

With property prices having risen meteorically in capital cities like Sydney and Melbourne, individuals could well find themselves owing many hundreds of thousands of dollars with little hope of paying it back.

Considering real unemployment is still rising and expected to hit 13% by Christmas, that doesn’t bode well for a mountain of debt that will eventually need to be serviced.

Nor are things much brighter on the business side of the ledger.

Remember, repayments on 15% of business loans have been deferred. Of those, 30% are currently receiving JobKeeper, subsidising their payroll to the tune of $1,500 a fortnight per employee.

The nation’s banks have given these customers until January to get themselves straightened out. The federal government has extended JobSeeker payments until the end of the year, with JobKeeper subsidies to flow until March.

However, with the reality borne out in CBA’s figures, and an economic outlook that anticipates the labour market to get worse before it gets better, it’s unclear how many Australians will be able to pay back their debts when the time comes.

Of course, the banks and the federal government can keep kicking the can down the road for some time yet. Indeed, it’s in no one’s interests to set off a wave of defaults and bad debt. In all likelihood, such a scenario would only set back the prospects of an economic recovery.

But right now it remains unclear how many of those deferrals will be able to make repayments if government support is withdrawn or they are unable to find unemployment.

Not even CBA holds the answer to that.

Have you frozen your mortgage? Are you concerned about when you will have to start making those repayments again? Get in touch with our reporter Jack Derwin at [email protected]

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