Mortgage Loans, Home Loans, Bad Credit Home Loans

Mortgage Arrears and late payments have gone up in the first three months of 2010, according to Standard & Poor’s credit agency.

Arrears on the mortgage loans bundled and resold as prime residential mortgage-backed securities rose by 0.19 per cent to 1.44 per cent in the first quarter of 2010.

For subprime mortgages, arrears – or late payments – rose by 0.67 per cent to 12.24 per cent in the same period.

Standard & Poors believe that the most vulnerable mortgage holders in the current market are the self employed and the first home buyers who entered the market while interest rates were at historically low levels.

The RBA has increased interest rates six times since October in an effort to blunt inflationary pressure and keep the economy’s growth sustainable, keeping rates on hold at 4.5 per cent in June.

According to minutes of the last RBA meeting released today, interest rates should remain on hold until August and possibly longer.

“Nevertheless, we believe the overall impact on defaults and losses is likely to be low if property values are preserved,” S&P said in a statement.

Australian capital city home prices jumped 20 per cent in the year to March but have begun to slow amid slumping home loan volumes and faltering auction clearance rates.

National city home prices edged up only 0.2 per cent to a median price of $460,000 in April, RP Data said last month.

Australia’s household debt position has grown from half a year’s disposable income in the early 1990s to about one and a half years’ income in 2006, largely on the cost of housing.