Despite hefty interest rate cuts, increasing numbers of borrowers are struggling to meet their mortgage repayments, according to Fitch Ratings.
Repaying a variable loan has become cheaper over the last 12 months, but Fitch has reported that the national share of mortgages that had become delinquent rose from 1.2% to 1.45%.
‘‘The Reserve Bank of Australia’s decision to reduce the cash rate did not have a positive impact on mortgage performance in the six months to end-March 2013, in contrast to the six months to end-September 2012,’’ said the Fitch report.
The Fairfield-Liverpool region of Sydney had the highest share of borrowers who were more than 30 days behind on their mortgage, after its delinquency rate rose from 1.82% to 2.37%.
The NSW Central Coast had the next highest share of missed repayments, followed by the Gold Coast, Caboolture Shire in Queensland, and outer south-western Sydney.
The best-performing regions were Boroondara City in Melbourne, south-east inner Brisbane and Sydney’s lower North Shore.
Areas that suffer most from mortgage stress tend to have higher rates of unemployment and lower average household incomes.
Fitch said the slump in south-western Sydney suggested there was a limit to how much cutting interest rates could do to prevent people falling behind on their repayments and delinquency rates may have hit a ‘virtual floor’ late last year.
With interest rates at their lowest for more than 50 years, there are some great rates available. The best thing to do is to compare rates from all the lenders. Let us help take the leg work out of doing this - Compare Home Loans now
Top Suburbs :
Get help with your investment property
Do you need help finding the right loan for your investment?
When investing in property, it is important to make sure that you not only have the lowest available rate that you can get, but also have the correct loan features for your needs.
Just fill in a few details below and we'll then arrange for a local Aussie Mortgage Broker to contact you and work out what features or types of loans are right for your needs. We'll even help with the paperwork. Plus and appointment is free.
We value your privacy and treat all your information seriously - you can check out