Westpac has revealed just 0.67 per cent of mortgagors were more than 90 days behind on their payments as at September 30, the same level as the year before.
This is despite four central bank rate rises since February.
There was a feeling the nation was going through a "sort of generational tough point", chief executive Anthony Miller said during a briefing after the big four bank handed down its annual results.
"But we only have to go back to 2023, 2024 and we had numbers significantly higher than where we are at today," Mr Miller said.
"You only have to go back 18 months ago and we had 90 days past due in our mortgage books that was about 20 or 25 basis points higher than where we currently got it."
Consumer sentiment is down, but spending activity doesn't reflect that.
Over the past year, the number of Westpac mortgage holders ahead on their payments increased, with the total balances of offset accounts climbing from $71 billion to $81 billion.
"So in the context of four interest rate increases, cost of living challenges, fuel challenges, we've more prepaid or more offset in the context of our mortgage book," Mr Miller said.
It's widely expected the Reserve Bank of Australia will on Tuesday tighten monetary policy rates for a fifth time, taking the key cash interest rate to 4.85 per cent - and Westpac believes there could be a sixth in early 2027.
Westpac noted there had been an increase in the percentage of mortgage customers receiving hardship assistance, such as temporarily reduced payments.
But it's still well under its portion of hardship cases from two years ago.
"It feels incredibly proportionate and appropriate in the context of what has gone on," Mr Miller said, referring to the rate hikes and the impact of the Middle East conflict on prices, including oil and transport costs.
The increase in hardship cases was driven by customers who were "overcommitted," meaning they had taken on more debt than they could handle, not for other reasons such as medical issues, unemployment or divorce.
Westpac's net profit dipped to $6.8 billion in fiscal year 2026, even as net interest income - the difference between interest earned and interest paid - rose by one per cent to $19.7 billion from the year before.
It was a solid result for the bank, which is in the midst of a multi-year transformation program to simplify core systems, cut operating costs, and lift its engagement with artificial intelligence.
"In an uncertain economic environment, we've remained focused on supporting our customers," Mr Miller said.
Westpac, second to Commonwealth Bank in size, pointed to strong growth in customer deposits and lending, which rose by six per cent and five per cent respectively, in the year ended September.
Westpac is targeting $100 billion in housing-related lending by 2030.
Moody's Ratings vice president Frank Mirezi said the results demonstrated the resilience of Westpac's earnings and balance sheet, supporting the bank's credit profile.
The bank declared a final dividend of 77 cents, taking the total payout to shareholders for the year to $1.54.
Westpac shares were changing hands about 2pm at $36.54, down 0.8 per cent, a slide of 5.4 per cent since the start of 2026.
Westpac also released its sustainability report on Monday, detailing its strategy and progress on key environmental targets.
The Australian Conservation Foundation said the report showed Westpac had moved ahead of other banks on deforestation.
But Market Forces said it indicated the bank had backslid on its climate commitments by increasing its lending to oil and gas extraction companies for the first time in four years.
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