The national financial complaints body received 7,014 mortgage disputes over the twelve months ending 30 June 2026, up 21% on the 5,818 recorded the year before. That is a bigger jump than the 19% rise in total complaints, which hit a record 119,949. Arrears data tells you who has already fallen behind. Complaint data can show who is struggling before that point.
Complaints can run ahead of mortgage arrears
A borrower rarely goes straight from a healthy repayment to missing one. First comes a squeeze, then a call to the lender, then, if that goes badly, a complaint. Complaints sit in the middle of that chain, which is why they work as an early-warning gauge for mortgage arrears.
The numbers point to pressure on household budgets. Hardship-related complaints rose 17%, which the complaints body ties to living costs and elevated interest rates. Of 5,566 hardship complaints, 1,676 involved home loans, up from 1,541 the year before.
One caution. Complaints are not defaults. Some people lodge them over a fee, a credit file error or a poor phone call, and not every dispute means a borrower is about to miss a repayment. Treat this as a signal, not a forecast.
Key numbers
- 119,949 total complaints in 2025-26, up 19%
- 7,014 mortgage complaints, up from 5,818 (a 21% rise)
- 1,676 home loan hardship complaints, up from 1,541
- 3,076 hardship complaints about no response from the lender
Silence is the main grievance
The most common hardship complaint was not a refusal. It was a lender failing to answer a request at all, cited 3,076 times. That detail matters more than the headline count.
A refusal at least gives a borrower something to work with. They can appeal, seek a different arrangement or shop around. Silence leaves them guessing while interest and fees keep running. For someone already stretched, a few weeks of waiting can be the difference between a manageable hardship plan and a missed repayment that sticks on their credit file.
The pattern also tells you something about capacity. When hardship requests rise, lender hardship teams are handling more volume. Slow or missing responses can be a sign those teams are under strain, though the data alone does not prove that.
Credit files are a second pressure point
Credit reporting disputes are taking a bigger share of banking complaints. Many involve people who say they never agreed to a credit enquiry, or who misunderstood what their file showed.
This links back to home lending. Credit file problems can make refinancing harder at exactly the moment a borrower wants a better deal. If you are on a high rate and hoping to switch, an unexpected enquiry or a late-payment mark can narrow your options. Our guide to mortgage stress and arrears covers how those marks build up.
Is this a conduct problem or a cycle problem?
Commentary on data like this tends to split two ways. One camp reads it as a lender conduct problem: institutions are too slow and too opaque. The other reads it as a cycle problem: rates are high, budgets are tight, and complaints are the predictable result.
The evidence supports both, which is the honest answer. Total volumes rise when borrowers are under strain. But the dominant hardship complaint being non-response is a process failure, not a rate failure. Higher rates explain why more people ask for help. They do not explain why so many get no answer.
There is also a regulatory angle. Over half of cases closed at the earliest Referral stage, which suggests many disputes could have been settled by the lender directly. The complaints body closed 117,150 cases, up 16%, and cut average resolution time to 69 days from 79. Faster resolution is good. But it also means more cases are reaching an external body that a stronger internal process might have handled.
For lenders, the risk is reputational and regulatory. A rising share of complaints that trace back to unanswered requests invites scrutiny of hardship handling. For the wider market, it adds to the case that regional borrowers are already carrying arrears risk in places where incomes are thinner.
What borrowers can do before a complaint
If your repayments are getting hard, move early. Waiting until you have missed one narrows your choices.
- Contact your lender’s hardship team in writing, so there is a record of the date and the request.
- Say clearly what you are asking for, such as a temporary repayment reduction, an extension or a capitalised arrears arrangement.
- Note when you sent it. If no reply arrives within a reasonable time, follow up in writing.
- If the lender still does not respond or the outcome seems unfair, you can lodge a complaint with the external dispute resolution body.
- Check your credit file for entries you do not recognise before you apply to refinance.
- Talk to a broker or financial counsellor about whether a switch makes sense. Serviceability rules differ between lenders, and a rate-pressure squeeze is felt differently across cities, as our look at who is squeezed in Sydney and Melbourne shows.
The bottom line
Record complaints do not prove a wave of defaults is coming. But a 21% jump in mortgage disputes and thousands of hardship requests met with silence is a warning worth taking seriously. Watch whether arrears figures follow the complaints, and whether lenders improve how they respond to borrowers in difficulty.
If you are under pressure now, put your hardship request in writing this week. For more analysis like this, subscribe to the newsletter.
General info, not financial advice.
