Mortgage arrears still getting worse

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From S&P:

Australian prime home loan arrears held steady in June. The Standard & Poor’s Performance Index (SPIN) for Australian prime mortgages remained unchanged from a month earlier at 1.38%, according to a recent report by S&P Global Ratings.

Arrears typically decline in June. While home loan arrears remain elevated year on year, we expect the performance of loan products to diverge as lenders compete for low-risk borrowers. This is positive for Australian residential mortgage-backed securities (RMBS) because around 60% of the loans that underlie portfolios are amortizing, owner-occupier residential mortgage loans with modest loan-to-value ratios.

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About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.