More borrowers behind on loan repayments
More Australians are falling behind on their mortgage repayments, new research has found.
According to FitchRating’s latest Australian Mortgage Delinquency by Postcode Report, delinquencies have increased considerably across all six states in Australia, with one per cent of borrowers one month or more behind on their scheduled balance.
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The worst performing state was Western Australia, where 1.95 per cent of borrowers were slipping behind.
Overall, delinquent borrowers tend to be in arrears on higher-than average outstanding loan balances.
The report found that recent rate increases were to blame for the rise in delinquencies.
“Between September 2009 and September 2010, the Reserve Bank of Australia increased the cash rate six times, each by 25 basis points. The average bank Standard Variable Rate also increased over this period and as of September 2010 stood at 7.40 per cent, negatively affecting delinquencies,” the report read.
