Prime home loan arrears increase

by Rebecca Pike20 Jul 2018

New data has shown arrears on Australian prime home loans increased during the month of May.

The Standard & Poor's Performance Index (SPIN) for Australian prime mortgages rose to 1.38% in May from 1.36% in April, according to a recent report by S&P Global Ratings.

The SPIN for non-conforming mortgages fell to a record low for May of 3.65% from 3.86% the previous month, according to the report, titled “RMBS Arrears Statistics: Australia”.

Arrears performance was mixed across the states and territories in May, with arrears in Victoria declining and New South Wales and Queensland recording modest increases.

Arrears showed a small decline in Western Australia. The Northern Territory overtook Western Australia to lead the nation with the highest overall arrears percentage.

However, loans in the Northern Territory represent about 1% of the total loans that make up the SPIN.

Non-conforming arrears fell for the third consecutive month to reach a historic low for May.

The most significant movement was in the category for loans 31-60 days past due, which fell from 1.94% in April to 1.40% in May.

The SPIN measures the weighted-average of arrears more than 30 days past due on residential mortgage loans in publicly and privately rated Australian RMBS transactions and is calculated for prime and nonconforming residential mortgage loans.

 

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