Loans that are greater than 30 days in arrears rose again in March, according to new research, spurred largely by difficulties among self-employed borrowers
Data from Standard & Poor’s found loans underlying Australian prime RMBS (residential mortgage backed securities) rose to 1.81 per cent from 1.79 per cent in February.
Standard & Poor’s credit analyst Vera Chaplin said the increase in arrears could be largely attributed to continued financial pressure among self-employed borrowers.
“The FullDoc SPIN (reflecting loans extended to PAYG borrowers) has declined marginally, while the LoDoc SPIN (reflecting loans extended to self-employed borrowers) increased by a further 0.25 per cent to 5.91 per cent in March,” Ms Chaplin said.
“We expect the LoDoc SPIN to remain around this level as the impact of the recent natural disasters and tougher business conditions—such as reduced revenues coupled with higher input costs and living expenses—work through the system.”