Mortgage stress is already building amongst a large proportion of Australian homeowners, if research released by mortgage brokers iSelect holds true across the country. The Galaxy Research study, commissioned by iSelect to assess the attitudes and behaviours of Australian mortgage holders, suggests that a third (33 per cent) of Australian households with a mortgage have had an interest rate increase during the last year, despite the official cash rate remaining at a low 1.5 per cent. The Galaxy Research found that if their interest rate was to increase by one per cent, over 780,000 mortgage holders (26 per cent) would struggle to some extent to make their repayments. A survey by UBS of 900 people who had taken out home loans over the previous year turned up a surprising detail. Although APRA data shows that more than 35 per cent of new loans over the period were interest-only, just 24 per cent of the survey said they had taken out such a loan. UBS analysts, led by Jonathan Mott, say the survey results suggest that nearly a third of interest-only home loan customers might not realise that is the type of mortgage they have. UBS said that, while this might sound farfetched, the finding "needs to be considered in the context of the lack of financial literacy in Australia." Mott said it suggested that many interest-only borrowers were unprepared for their loans reverting to principal-and-interest and may face "substantial stress" when that happens, or when interest rates rise. Morgan Stanley's lead bank analyst, Richard Wiles revised earnings per share forecasts for financial 2018 and 2019 across the big four banks as follows: ANZ down 4.0 per cent and 4.2 per cent, CBA down 2.1 per cent and 2.5 per cent, NAB down 2.3 per cent and 2.5 per cent and Westpac down 2.4 per cent and 2.6 per cent, the AFR reports. The mark-down of ANZ's prospects is a sign it needs to compete more aggressively than its peers to prevent loss of market share. Bendigo Bank down 4.1 per cent and 5.1 per cent and Bank of Queensland down 1.8 per cent and 1.9 per cent respectively.