The average borrower continues to remain ahead on their home loan, despite higher interest rates, as this Reserve Bank graph shows.
The Reserve Bank says the share of borrowers who are behind on their mortgage is “expected to remain very low”, even if conditions worsen.
“About 1.5% of borrowers are estimated to have their essential expenses and mortgage costs exceed their income and be at high risk of depleting any available buffers. Even if the unemployment rate were to increase by 2 percentage points … the share of existing borrowers at risk of running out of buffers over the next year or so would likely remain at low single-digit levels. Similarly, most borrowers would be well placed to service their housing loans if interest rates were to increase further.”
Furthermore, only about 0.1% of loans are in negative equity at current housing prices, which means the overwhelming majority of forced sellers would be able to repay their mortgages.
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