Resilient Australian borrowers are still on top of their mortgage repayments despite the pressure of high funding costs and interest rates.
According to Fitch Ratings the proportion of missed payments, while increasing - remained low and within Fitch’s rating parameters
According to the Fitch Dinkum Index released today mortgage delinquencies on full-docs deteriorated only slightly in Q208 with 30+ day delinquencies up to 1.48% from 1.31% in Q108.
Low-doc – which include prime and non-conforming – increased more significantly to 5.28% from 4.98% which it accredits to the fall in lenders willing to write low-doc loans, leaving borrowers unable to refinance their way out of trouble.
“Fitch has broken down the performance of prime low-documentation loans versus the performance of non-conforming low-documentation loans and, not surprisingly, there was a significant deviation between the two,” said Leanne Vallelonga, Associate Director in Fitch’s RMBS team.
“Delinquencies for prime low-documentation loans reaching 2.98% for the quarter versus the significantly higher level of 15.71% for non-conforming low-documentation loans,” she said.
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