Arrears down as Aussies get to grips with home loans

Mozo

Wednesday 03 June 2009

The interest rate cuts enacted by the Reserve Bank of Australia (RBA) before Christmas helped to reduce home loan arrears during the first quarter of 2009, new figures from Fitch Ratings show.

According to the group, there is usually a sharp rise in missed home loan payments after the festive season as credit card binges catch up with household finances.

However, Fitch associate director for structured finance Leanne Vallelonga said that the RBA and the Rudd government had helped to reverse that trend this year.

"The combination of historically low interest rates and the Australian Government’s $1,000 payments to eligible families in December 2008 has provided a buffer," she said.

Figures from the group showed that home loan delinquencies fell to 1.52 per cent in the first three months of the year, down from 1.75 per cent in the three months to December 2008.

The new figures follow the latest official data showing that the worst fears for Australia’s economic performance during the first quarter have been allayed as the country avoided following the likes of the US and the UK into a full-blown recession.

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