According to Standard and Poor’s, the number of Australian residential mortgages which fell by more than 30 days into arrears surged in January 2010.
The ratings service found home loans more than 30 days in arrears jumped to 1.39 per cent in January, from 1.25 per cent in December 2009.
The company’s credit analyst Vera Chaplin attributed the surge in arrears to the five interest rate hikes since October last year.
According to Ms Chaplin, the effects of the last five rate increases are finally starting to be felt by residential borrowers. They have also seemed to have contributed to the slowing of property prices over the recent few weeks.
Sub-prime RMBS arrears also increased in January, rising 0.51 percentage points to 12.08 per cent.
With International Monetary Fund predicting rate increases by another 75 points before the end of 2010, this trend is only likely to continue.