Nobel Finance Sydney – Money Matters Newsfeed

First homebuyers and self-employed borrowers are at risk of falling into mortgage arrears, according to research by Standard & Poor’s (S&P). Figures from the ratings agency revealed that a growing number of borrowers are missing their mortgage payments as a result of rising interest rates. The report found that the number of borrowers who had missed repayment. deadlines climbed 0.19% up to 1.44% in the March quarter. Arrears rates for sub-prime borrowers,
which account. for about 10% of home loans. rose to 12.24%. S&P predicted first homebuyers, who entered the property market when interest rates were historically low, and self-employed borrowers. who are more sensitive to economic conditions, will be the most sensitive to rising rates. The Reserve Bank of Australia (RBA) left the cash rate at 4.3% in its June meeting, as it paused to gauge the global recovery. However, economists are predicting rates will increase to
5% by the end of 2010.

Tags: home loan, interest rates