Mortgage delinquency rates on the rise - Mortgage DomayneSkip to main content

Mortgage delinquency rates on the rise

June 1, 2024

A week of contradictions for the finance brokering industry with the AFR publishing several articles last weekend with wildly untrue representations of the broker industry. Needless to say senior members of our industry hit back hard with a heavy dose of reality, prompting the AFR to publish a defence of industry riposte from the Mortgage Finance Association of Australia. As for the impetus of the AFR’s article, one could speculate that as major advertisers, the banks had some influence.

Then, as if to rile the AFR, data later this week revealed that the market share of mortgages written by brokers was now at a record high 74.1%.

In this week’s newsletter, we provide an update on the current state of mortgage delinquency in the Australian Market.

Data released this week by Moody’s Ratings revealed the proportion of households falling behind on their mortgage repayments is rising nationwide and is expected to increase further this year due to prolonged high inflation and high-interest rates putting pressure on budgets.

Key Findings

Ratings Analysis:

  • Home loan arrears are rising in every state and territory and most local areas.
  • 30-day delinquency rates have more than doubled in some suburbs as households struggle with cost-of-living pressures.

Inflation Statistics:

  • Inflation remains elevated, rising 0.1 percentage points to 3.6% in the 12 months to April.
  • Increases in housing, food, alcohol, and transport costs are major contributors to the inflation rate.

Delinquency Rates by Region:

  • Regional and outer-suburban areas show higher delinquency rates compared to inner cities due to lower disposable incomes.
  • Highest Delinquency Rate:
  • Byford in south-east Perth: 5.33%

Greatest Increase in Delinquency:

  • Kingston in Queensland’s Logan region: 3.16 percentage points increase to 4.19%
  • Six Melbourne suburbs are among the top 10 worst-performing regions, with delinquency rates between 3.57% and 5.01%.

Comparison with Capital Cities:

  • Capital cities, especially Sydney and Brisbane, have some of the lowest delinquency rates due to strong home-value growth and rising incomes.

Australian Bureau of Statistics Findings

  • April marked the second consecutive month of slight increases in annual inflation.
  • Housing inflation rose by 4.9% over the year.
  • Food and non-alcoholic beverage inflation increased by 3.8%.

These findings highlight the growing financial strain on households across the country, with significant regional disparities in delinquency rates and the continuing impact of inflation on everyday expenses.

Variable

The rates below are based on a $500,000 loan, with the borrower making principle and interest payments with a loan term of 30 years. The rates quoted may vary depending on the borrowers LVR.

1 Year Fixed

The rates below are based on a $500,000 loan, with the borrower making principle and interest payments with a loan term of 30 years. The rates quoted may vary depending on the borrowers LVR. At the end of the three year fixed period, the borrowers interest rate will revert to a standard variable rate for the life of the loan.

Make an enquiry

Please enable JavaScript in your browser to complete this form.

Testimonials

So, what is it our customers love about us?

  • People first

    We put our customers at the centre of everything we do. Everything is geared around you.

  • Making it easy

    We'll take care of everything so you can focus on what's important.

  • Experienced brokers

    With years of experience, our brokers will answer all your questions. Simple.

  • We're in it together

    From the first chat right through the life of the loan, we're here for you.

  • Great rates

    With access to a huge range of loans and lenders, our brokers will make sure you secure a great rate.

  • Tailored solutions

    We'll sit down and discuss your specific needs. Your loan will be tailored specifically to you.

Give us a call

Our highly experienced brokers are here to help to you. Call anytime for a no-obligation chat.

Call 1300 366 296

Book an appointment

Our highly experienced brokers are here to help to you. Call anytime for a no-obligation chat.

Book an appointment