Australian borrowers remain largely on top of their commitments despite a worsening economic environment according to Standard & Poor’s’ latest arrears data.
Arrears on residential mortgage loans underlying prime RMBS rose fractionally to 1.58 per cent in October – up just 0.06 on the previous month.
In contrast low doc loans have fared far worse, rising to 3.83 per cent, more than double the 1.89 per cent registered one year ago.
Standard & Poor’s credit analyst Vera Chaplin said that it could be some time before any improvement was seen in arrear levels.
“We don’t expect to see any real effect of the rate cuts on arrears data for a few months due to a reporting lag. We also think that any benefit of the cuts to borrowers may be offset by seasonal arrears pressures traditionally felt in the first few months after the Christmas/New Year period.”
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