APRA chief executive John Lonsdale said 35,000 households worth $23bn were underwater due to mortgages

Approximately 35,000 Australian households have defaulted on their mortgages and are in “deep financial distress”. According to the prudent regulatorIt announced on Monday that there would be no changes to its controversial stress test rules for borrowers.

Australian Prudential Regulation Authority chairman John Lonsdale has pushed back against politicians and some lenders amid debate over the merits of a serviceability buffer, arguing that stressed households represent about $23 billion in bank loans.

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