A ratings agency has revealed the arrears rate in Australia remains ‘steady’ but strong variations exist in low doc loans.
Moody’s second-quarter report showed the prime 30-plus arrears rate at 1.66%, almost identical to 2011’s 1.67% rate.
However, it warned 100% low doc loans were rising in delinquency rates, which is currently at 5.72%. It said the percentage could reach 6% “in the coming months.”
“Excluding 100% low doc deals, the prime 30-plus arrears rate would have been nine basis points lower, at 1.57% in June,” it said.
The non-conforming 30-plus arrears rate increased to 12.47%, from 12.06% in the first quarter.
Meanwhile, Moody’s blamed “limited refinancing opportunities” for a fall in redemption rates for the non-conforming deals, which dropped to 25.20%.