Telltale Signs Your Dover Heights Debt Is Becoming Dangerous

Your Dover Heights debt is becoming unsustainable when, under a 3% interest rate stress test, total repayments chew through more than 35–40% of your after‑tax income and you have less than 3–6 months of essential costs in cash or true offset. Once you’re topping up living costs with new debt or asset sales, you’re in the danger zone, not just a rough patch.

Here’s how to check where you stand this week.

A clear-eyed look at your numbers is the first step to defusing debt stress.

Quick stress test: are you over the line?

Run these two numbers first. If both are flashing red, treat it as urgent.

1. Stressed repayment ratio

   • Add up all loan repayments: home, investment, car, personal, credit cards (assume full repayment over 3 years), business loans you support personally.
   • Stress‑test at 3% above your current interest rate (APRA style). Your broker or bank can give you this figure.
   • Divide that monthly total by your after‑tax household income.

   If the stressed ratio is above 35–40%, research and our other guides say your debt is drifting into unsustainable territory for most households (see also /insights/inner-south-debt-load-red-flags-unsustainable and /insights/debt-red-flags-unsustainable-what-to-do-early).

2. Cash buffer check

   • Add up essential monthly costs: loan repayments, food, utilities, insurance, transport, basics for kids.
   • Count only cash or true offset (not redraw, shares or crypto).
   • Divide buffer by essentials.

   If you have less than 3–6 months, you’re running thin. For Dover Heights‑level mortgages and self‑employed borrowers, 6–12 months is the safer target.