Australians falling behind on their home loans

Posted: 22 July 2016 9:29 am

quiz-australian-moneyMore Australians are behind on their mortgage repayments due to slow wage growth and seasonal spending.

New data from Fitch Ratings shows mortgage arrears increased in the March quarter, the Australian has reported. Arrears rose from 0.95% in the December quarter to 1.11%. Fitch put the rise down to seasonal Christmas spending, a rise in standard variable rates and low real wage growth.

“We expect arrears to fall over the next two quarters once the effect of Christmas spending fades and the May 2016 interest rate cut starts benefiting borrowers,” Fitch said.

Fitch had previously predicted at the release of its December quarter arrears figures that the number of Australians behind on their mortgages could rise as property prices moderated.

In spite of the rise, arrears are below their March 2011 peak of 1.75%, the Australian said. The result sees March quarter arrears at their lowest since prior to the GFC.

Fitch warned that a rise in unemployment or fall in real wages would pose a major threat to Australian banks, the Australian reported. The ratings agency said low interest rates and rising house prices were currently keeping loan losses low, and that the tighter lending standards currently in place could provide stability if economic conditions worsened.

Latest home loans headlines

Find the right home loan now

Ask an Expert

You are about to post a question on

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked

Finder only provides general advice and factual information, so consider your own circumstances, or seek advice before you decide to act on our content. By submitting a question, you're accepting our Terms of Use, Disclaimer & Privacy Policy and Privacy & Cookies Policy.
Go to site