Consumer group CHOICE has released data revealing Tasmania as the state hardest hit by Australia's mortgage crisis.

Data from Digital Finance Analytics shows that 55.79% of households with a mortgage in Tasmania are deemed to be in mortgage stress.* Launceston leads the list with over 4700 households on the brink.

*Data from Digital Finance Analytics, collected in April 2021.

"55% of Tasmanians with a mortgage are in mortgage stress. Tasmania was once one of the most affordable places in the country to live and now communities like Launceston are living on the brink," says CHOICE banking policy expert Patrick Veyret.

"While the early signs of Australia's economic recovery are promising, many families are faced with underemployment, stagnant wage growth, and government support being wound back," says Mr Veyret.

"Banks profit from trapping people in an endless cycle of debt. Financial counsellors regularly report that people will often forgo spending money on essentials such as utilities and food before they default on their mortgage," says Mr Veyret.

"The Banking Royal Commission was clear: lenders routinely broke safe lending laws and trapped people into unaffordable loans. Commissioner Hayne recommended that safe lending laws be enforced, not dismantled. Safe lending laws are an essential consumer protection to ensure that banks don't load people up with excessive debt, " says Mr Veyret.

This new data comes as the Federal Government struggles to gain enough support in the Senate to axe safe lending laws, with more crossbench Senators announcing they will not support the Government's policy.

"Axing safe lending would be disastrous for the Tasmanian community and economy. People across the state are already doing it tough, they don't need to be burdened with more reckless bank lending," says Mr Veyret.

"Senator Jacqui Lambie has a strong history of standing up for consumer protections against the power of the big banks. We are hopeful she will stand up for Tasmanian households doing it tough and vote against the legislation," says Mr Veyret.

Over 39,000 people and 125 community sector organisations, including CHOICE, Anglicare Tasmania, Community Legal Centres Tasmania, Financial Counsellors Association Tasmania, Hobart Community Legal Service, and Uniting Vic.Tas have endorsed an open letter calling on politicians to protect safe lending laws.

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Editor's notes:

Top 10 TAS postcodes in mortgage stress (by count)