Finder makes money from featured partners, but editorial opinions are our own.

Fewer Aussies behind on mortgages, but delinquencies could rise


house line graphFewer Australians are falling behind on their mortgage payments, but that number could rise over 2016.

Mortgage arrears have remained near record lows amidst low rates and strong house price growth, a new report has claimed.

The Fitch Dinkum Index has shown mortgage delinquencies falling 0.2% over the year, to a near-record low of 0.95% in the December quarter. The result represents the lowest fourth quarter level for arrears in 11 years.

Fitch Ratings said the level of arrears reflected strong house price growth, low unemployment, low mortgage interest rates and low inflation.

Mortgage delinquencies among self-employed borrowers were up, however, rising 0.32% to 7.29%. Fitch said the rise came in spite of positive serviceability factors.

While arrears remain low, the ratings agency said it expected a rise in delinquencies over 2016 as property prices moderate.

“Losses are likely to remain limited, despite the likely slowdown in property price growth, because of tighter serviceability assessments recommended by the Australian Prudential Regulation Authority and the Australian Securities & Investments Commission. The introduction of measures, such as interest-rate floors, means borrowers should have more buffers to withstand increases in interest rates and unemployment, and a slowdown in the housing market,” Fitch said in a statement.

The sentiment echoes forecasts from ratings agency Moody’s, which predicted below-trend economic growth and slowing house price appreciation could lead to a rise in mortgage delinquencies over the year.

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 6. Finder Group Privacy & Cookies Policy.

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
Go to site