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Date Published : Friday, June 20, 2008
The number of home loan borrowers who are at least one month behind in their repayments has hit a 12-year high, according to new figures from credit rating firm Standard & Poor (S&P).
News.com.au says the company's latest data for the second quarter of the year reveals 1.45 per cent of Australians with standard mortgages are at least one month in arrears, up from 1.09 per cent in the last quarter of 2007.
Among borrowers with low documentation loans, the rate was higher at 2.57 per cent compared to 1.97 per cent in the three months to last December.
However, it is the sub-prime market - where mortgage loans taken out by individuals who do not meet the lending criteria of major banks - that has seen the biggest rise in people falling behind in repayments, with "almost 15 per cent" of such home loans now in arrears.
S&P credit analyst Vera Chaplin told the website that many people are defaulting on their mortgage loans because of the rising prices for food and fuel, which are pushing up the cost of living and squeezing many Australians' bank accounts.
She also said Australia's 7.25 per cent interest rates are exacerbating the problems, along with the "seasonal impact" of the often expensive New Year period.
"We have seen recently that more mortgages are remaining in arrears for longer," she commented.
In these difficult economic circumstances, it has perhaps never been more important for prospective homeowners looking to take out a mortgage to compare the deals on the market to ensure they get the best one for their circumstances.
According to figures published by the Australian Bureau of Statistics, total mortgage lending fell by three per cent in April to approximately $19.46 billion.
Find and apply online for the best loan deals.
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