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By: Staff Reporter
Arrears on Australia’s prime residential mortgages rose slightly during April, new research has found.
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According to Standard & Poor’s latest Mortgage Performance Index, greater than 30 day arrears on residential mortgage loans underlying Australian RMBS rose 0.03 per cent to 1.47 per cent in April.
"Although marginal, the increase in arrears is mainly in the greater-than-90-days category, where we expect these borrowers may find it more challenging to recover from financial stress, especially when interest rates have been rising in Australia,” Standard & Poor’s credit analyst Vera Chaplin said.
“We believe the overall arrears will remain below 1.5 per cent because some borrowers will take some time to adjust to the higher mortgage payments. However, if the interest rate were to rise further, arrears could climb higher.”
However, the news wasn’t all grim, with arrears on subprime RMBS easing slightly – falling 89 basis points to 11.34 per cent.
