Mortgage borrowers choosing to default on other bills before missing a repayment as arrears rates tick up
ABCFinancial services consultant Andy Barrow used to be a home owner in the nation's most expensive city. Households falling behind on other bills Housing loans are "in arrears" when borrowers miss their minimum scheduled payment but are still expected to make good on their loan, according to the Reserve Bank. "Mortgage arrears in our data set are sitting at around 1 per cent, which is actually around long-term averages," said Erin Kitson, director of structured finance at S&P Global Ratings. "People are falling behind on council rates, utility bills — like their electricity, gas and water bills — telephone bills, other debts like credit cards and personal loans," Matthew Martin, legal director of Mortgage Stress Victoria, said. In a survey of 1,000 Australians, the comparison website Finder found 21 per cent of those interviewed had switched to making "interest-only" repayments in the past two years to avoid falling behind on their mortgage.
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