RBA warns two factors risk increasing number of Australians caught in mortgage struggle

Vast majority of borrowers servicing their debts but arrears could grow if economy slows more than expected, bank says

• Follow our Australia news live blog for latest updates
• Get our breaking news email, free app or daily news podcast

The number of Australians in financial stress is small" but will be magnified" if the economy slows more than expected or interest rates linger higher for longer, the Reserve Bank has warned.

While overseas challenges - including a faltering Chinese economy - could also upset forecasts, Australia's financial system continued to display a high level of resilience", the bank said in its semi-annual financial stability review.

Sign up for Guardian Australia's breaking news email