Some more good news has greeted the mortgage market recently as Fitch Ratings said that late home loan payments across Australia fell to the lowest level for two years, mostly because interest rates have been lower which naturally reduces the burden of debt on borrowers and helps people’s arrears reduce.
This great information covers loan payments that are 90 days late or more.
The Australian residential mortgage performance index has been able to show that mortgage-backed securities fell to a new low of 0.55% in the quarter leading up to December when this is compared to 0.63% for the July to September period in 2012.
Offering the lowest rate over the past 50 years, the Reserve Bank of Australia has seen its benchmark interest rate reduced by 1.75 percentage points over the past two years to a new low of just 3%.
This means that the home loan standard variable rates were set at 6.45% at the end of March which is the lowest rate seen since November in 2009.
Which Factors Have Helped These Figures?
A combination of factors has helped provide these new figures which were a great sign for almost all mortgage borrowers.
During 2012, the Reserve Bank of Australia has cut the cash rate which is set at the Australian benchmark for all mortgage lending. There’s also been a remarkable lower level of unemployment mixed with an underlying strong economy. All of these factors will help the economic environment improve over the next 12 months.
Despite the recession and the stagnation of house property values, these recent low interest rates and 20 years of mostly economic growth have seen property valuations increase, but at the same time household debt has built up significantly.
For people who are between one and two months late with their mortgage payments, which accounted for 0.69% of current mortgages, the report showed an increase from 0.49% which was blamed on a small increase in standard living costs.
The Reserve Bank of Australia is expected to bring the cash rate to 2.75% by the end of 2013.
Fewer Worries on the Way
The figures also suggest that a lot less people are having trouble meeting their monthly mortgage debt repayments and that perhaps the recession really is behind us all now which will hopefully lead to a further gradual increase in property prices.
This is a good time to speak with your mortgage brokers in Rockingham because they will be able to tell you what deals are available from the many bank and home loan lenders.
If you are one of the people suffering with being behind with your mortgage payments, this is also a good time to speak with your mortgage broker because you will be able to set a plan in motion to be able to clear your debts so that you can look forward to a time when you can replace your current mortgage with a new deal and begin to set your credit record forward again.
*As of press time, the RBA Board “decided to lower the cash rate by 25 basis points to 2.75 per cent, effective 8 May 2013.”