The figures released by Fitch Ratings, a global ratings agency details mortgage performance by postcode, reveals the scale of rising mortgage pressure, with 1 in 400 borrowers falling behind on home loan repayments since September last year. They also show the mortgage hotspots, down to the suburb.
The Fitch numbers are assessed on borrowers more than 30 days late on a mortgage payment. For the first time in the history of the report, Queensland is the worst performing state with 2 per cent of mortgage holders in arrears.
It reveals Logan City is the worst district in Australia for mortgage delinquency with 2.1 per cent of mortgage holders in default beyond 30 days.
In NSW, the hotspot for mortgage arrears continues to be in the south-western and western suburbs of Sydney, as well as on the Central Coast.
Another report, released by JP Morgan blames the loans issued in 2009 after rates had been cut aggressively and the first home owners grant doubled to fight the global financial crisis.
The report’s author, Scott Manning, says the dramatic slide in the Reserve Bank’s cash rate from 7 per cent to 3 per cent between October 2008 and April 2009 “improved outcomes for borrowers when asking their mortgage providers how much they could borrow”.
“First home owners used the falling cash rate to increase the average amount borrowed by 25 per cent,” Mr Manning said.
”They were not alone in expanding their gearing.”
Michelle Hutchison, RateCity’s Consumer Advocate, said missing a mortgage repayment could cost borrowers much more than a pain in their wallets.
“It’s no surprise that more borrowers are struggling to meet their repayments in the first quarter of the year following substantial interest rate increases by most lenders in November and December and a string of natural disasters, which left many Australians struggling financially.
“But missing a mortgage repayment could cost more than a penalty fee. Our data shows that the fee for missing a repayment – or mortgage arrears administration fee – is $34 on average and some lenders charge up to $195 each missed payment.
“For two months of missed payments you could have been charged almost $400 as well as adding two more months of repayments and interest to your loan term,” Mrs Hutchison said.
“But heavy fees are not the only concern, because missing your mortgage repayments by more than 60 days is likely to be recorded on your credit file. This may cause a problem when you want to take out a loan or credit card in the future.”
Worst mortgage defaulting areas:
Logan City 2.10 per cent
Outer South Western Sydney 1.98 per cent
Central Coast Sydney 1.88 per cent
Blacktown (NSW) 1.86 per cent
Fairfield-Liverpool (NSW) 1.85 per cent
Caboolture Shire 1.84 per cent
Gold Coast West 1.83 per cent
Outer Western Sydney 1.82 per cent
Southwestern Western Australia 1.78 per cent
Ipswich City 1.78 per cent