Coastal towns most likely to default on home loan.

Thursday 07 February 2013

Article by Mozo

With the current state of the Australian economy, areas that rely on tourists as a primary source of income is where property owners are most likely to default on their home loan.

Home loan default

The latest research by Fitch Ratings has revealed the Sunshine Coast, Gold Coast and South West Western Australia were amongst 20 areas with the highest amount of home loans that are more than 90 days over due in payment.

"Coastal regions that rely on tourism are less effected by monetary policy and more by the high Australian dollar," according to Fitch associate director, James Zanesi. 

Montrose in Hobart's northern suburbs had the nation's highest amount of home loans in arrears , with over 3.2 percent of borrowers over 30 days behind in repayments. Inner city loans, particularly in Sydney and Melbourne were the best performers in comparison, at 0.68 percent higher than the national average.

Overall the number of people who failed to meet their repayments dropped by 1.2 percent across Australia. The improvement being attributed to consecutive interest rate cuts in 2012. With an average lag of 3 to 4 months  for cuts to take effect on the market, results are expected to improve further for the opening months of 2013, reports Nine MSN.

The Reserve Bank has put interest rates on hold at 3.00% for February but there are still a number of ways for home loan owners to significantly reduce the interest repayments on their loan. The interest rates  between lenders can vary considerably but through a simple home loan comparison, borrowers can easily switch to the lowest rate home loans available on the market.

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