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ISCOVER
Staff Reporter
Arrears on loans underlying Australian prime residential mortgage-backed securities are on the rise, new research has revealed.
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According to Standard & Poor's Ratings Services, loans underlying prime RMBS that are greater than 30 days in arrears rose to 1.61 per cent in the first quarter.
In addition, subprime RMBS arrears rose to 12.57 per cent from 11.09 per cent during the same period.
But despite the increase in arrears, Standard & Poor's Ratings Services credit analyst Narelle Coneybeare said the results largely aligned with market predictions.
“The current arrears and prepayment trends reflects the seasonality we typically see over the post-Christmas period. Looking forward, we expect that interest rate cuts in recent months may start to be reflected in improving arrears and higher prepayment trends over the coming months, although we expect the impact to remain moderate. Conditions for self-employed borrowers continue to be challenging, however,” she said.
