Forty per cent a better benchmark of stress

The results of a survey of home loan borrowers has challenged the widely held view that the threshold for stressed borrowers is when more tan 30 per cent of gross family income is committed to housing costs.

A survey of 1200 borrowers by Deloitte found that fewer then 20 per cent of those who had loans that required repayments of between 30 and 40 per cent of household income felt "stretched" by their mortgages.

About half in that category said they were at their maximum borrowing level but they were coping with their commitments.

But the number feeling stretched by their mortgages rose sharply for those whose home loan payments represented more than 40 per cent of gross household income.

Deloitte's lead partner in data analytics, Anthoy Viel, said Deloitte had not defined the term stretched when it surveyed borrowers.

Vie said: "We were looking at a graduation. In the first group people were looking for more debt. In the second group people were comfortable with their debt. In the third group people felt their mortgage debt was at its maximum level. Then there were those who felt stretched."

Deloitte found that about 40 per cent of borrowers whose loans repayments were in excess of 40 per cent of gross household income said they felt stretched.

The professional services firm published the survey findings in its annual report on the Australian mortgage market and released on Friday.