Mortgage Arrears at 11 month high - Sydney Morning Herald 27-5-08
Australia's delinquencies on mortgages to people with good credit histories rose in February to the highest in 11 months, according to Standard & Poor's.
Payments on so-called prime loans more than 30 days late increased to 1.28% of mortgages used to secure bonds, from 1.24% in January, S&P said today in a report.
This is the highest since March 2007 and equals the rate of delinquencies in February last year, the Standard & Poor's Prime Australian Mortgage Performance Index, or SPIN, shows.
Arrears rose in February because of Christmas credit spending, volatility in global credit markets and the lifting of the benchmark interest rate by Australia's central bank to a 12-year peak of 7.25%, Vera Chaplin, analyst at S&P in Melbourne said in the report.
"The two official interest rate rises in February and March and the lenders' rate rises that were over and above the official rises will make it increasingly difficult for borrowers to correct their arrears position; this is particularly evident in the subprime market,'' she said.
 Delinquent subprime loans rose to 13.99% in February from 13.38% in January, S&P said. Borrowers with loans that are more than 90 days in arrears reached 7.42%, which is the highest since November 2000.
