Mortgage delinquency rates have dropped across the country according to the latest report, but outer suburbs in Queensland and Victoria are still finding it tough.

Stable interest rates and booming housing markets had an impact during the twelve months to September 2014, with national mortgage arrears 34bps lower than a year earlier, according to the report by global ratings agency Fitch Ratings.

However, with a delinquency rate of 1.67%, Hume, Victoria was the worst-performing region in Australia by both dollar volume and number of mortgages. Despite delinquencies in this region improving significantly – falling 126bps from the peak in March 2014 – Hume, Melton-Wyndham and Northern Outer Melbourne in Victoria improved less than other regions in terms of mortgage performance.

Fitch analysts expect these regions to continue to perform poorly given their performance is mainly driven by socio-economic variables and local economies.

“Unemployment in these areas has increased to the highest level in three years at approximately 9%. House prices have also shown little appreciation in the last three years, with Hume and Melton recording growth of 1% and 10% respectively,” the report states.

Queensland remained the worst performing state, showing the lowest level of improvement at 38bps. Five of the worst-performing postcodes were located around Brisbane, three of which were in the Gold Coast area. Surfers Paradise had previously been among the worst-performing postcodes, while Oxenford appeared in the list for the first time in September 2014.

Northern Queensland was the only region in Queensland to worsen in the six months to September 2014, up by 6bps, with delinquencies in Mackay improving the least.

Western Australia held as best performing state, with 0.84% of delinquent loans, up from 1.99% end-March 2011, which the report describes as a "remarkable improvement in mortgage performance".

However, the report revealed little divergence among the delinquency rates across all six states. The gap between the best and worst-performing states was only 20bps, compared to an average of 74bps over the past 8 years.