Dinkum Index: Mortgage defaults to rise

The support for mortgage holders over the past 18 months has been extraordinary. From suspended interest payments to cratered fixed interest rates, the worst of times was suddenly transformed into the best of times for the most leveraged.

But those concessions are now ending as the RBA’s TFF rolls off and fixed rates rise. Plus banks get that little bit meaner to the stressed. Fitch sees stress coming:

Seasonal Arrears Increase: 30+ day arrears rose by 4bp qoq to 1.05% in 1Q21. Historically, arrears increase in the first quarter due to Christmas spending. This is the 14th occurrence where firstquarter arrears were higher than fourth quarter since 2005.

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