(Australian Associated Press)
Interest rate rises are partly to blame for more Aussies falling behind on their mortgage repayments, according to a leading ratings agency.
The number of home owners more than 30 days behind on their repayments grew from 1.16 per cent March to 1.21 per cent in April, S&P Global Ratings said on Tuesday.
“Part of the increase reflects a decline in outstanding loan balances, but we believe interest rate rises announced by different lenders during the past few months affected the Standard & Poor’s Performance Index for Australian prime mortgages, given that most of the loans are variable rate mortgages,” the ratings agency said.
Lenders have recently hiked rates for interest-only loans to comply with an Australian Prudential Regulation Authority’s directive in March that banks must limit higher risk interest-only loans to 30 per cent of new residential mortgages.
Queensland recorded the greatest growth in home owners more than 30 days behind on their mortgage repayments, with arrears rising to 1.66 per cent in April, from 1.58 per cent in March.
NSW had the next largest increase, where arrears rose to 0.91 per cent, from 0.85 per cent.
The S&P report looks only at loans in Australian residential mortgage-backed securities transactions, which account for about five per cent of all outstanding home loans, but are considered representative of the broader market.