This study is motivated by concerns regarding growing numbers of middle-aged Australians who are carrying mortgage debt into retirement and paying off higher levels of debt relative to house values and income. These trends have significant consequences for older Australians’ wellbeing and affect the ways in which older homeowners manage their wealth portfolios. We address three key research questions. Firstly, how significant are investment and repayment risks for older Australian mortgagors? Secondly, what impact does mortgage indebtedness have on older mortgagors’ personal wellbeing? Thirdly, how do older Australians in mortgage stress manage their superannuation wealth? We draw on a nationally representative panel dataset for the analyses. Our econometric model findings show that investment risk is a serious concern for some older mortgagors and there has been a severe worsening of repayment risk over the last three decades. Personal wellbeing declines when older mortgagors are faced with difficulty meeting mortgage payments, as evidenced by a deterioration in mental health among both males and females. An increase in repayment risks also increases the chances of superannuation drawdown by older retired mortgagors, with potential ramifications for the viability of the retirement incomes system in the years to come.