The Reserve Bank has sounded a cautionary note as more homeowners find themselves struggling with mortgage payments, especially those aged 30 to 50. The bank’s six-monthly Financial Stability Report highlights the strain on households with high debt relative to their incomes, exacerbated by rising interest costs and economic pressures. Non-performing loans are on the rise, expected to reach 0.7% by year-end, with arrears also increasing. As fixed mortgage rates adjust upward, borrowers may face challenges in managing debt, potentially impacting banks’ profitability. Rising unemployment adds further risks, while businesses grapple with high costs and reduced consumer spending. The Reserve Bank is considering Debt to Income Ratios to mitigate risky lending practices. Additionally, soaring insurance costs are becoming a growing concern for households, prompting the bank to address these issues in a special paper.