Rising interest rates are not the defining cause of mortgage stress, according to mortgage insurer Genworth Financial’s Managing Mortgage Stress spotlight report, released yesterday.
Genworth found through its Hardship Solutions program – which works to assist borrowers unable to meet debt obligations – that the main causes for financial hardship were illness or injury (38 per cent of applications), unemployment (15 per cent) and decreased income (15 per cent).
Only two per cent of assistance applications were due to rising interest rates alone.
The spotlight report also found that mortgage stress was not as widespread as suggested.
According to Genworth, less than 5,000 borrowers of over the one million it insurers were more than three months behind their mortgage repayments.
While Genworth is prudent about the loans it insurers, this indicated that the majority of Australian borrowers are meeting their mortgage obligations.
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