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Rate cuts help borrowers meet repayments

23/12/2011

The proportion of home owners failing to pay their home loan instalments on time fell nationally in September, down nearly a quarter since March, the latest Fitch Ratings report on residential mortgages shows.

The improvement in borrowers' ability to pay back loans was largely due to the Reserve Bank keeping interest rates stable, Fitch said. The two recent cuts in rates would help them further.

At least 1.42 per cent of borrowers across Australia failed to make their mortgage payment within 30 days in September compared with March highs of 1.77 per cent.

"Those regions which have shown strong sensitivity to mortgage rates due to socio-economic factors and which were affected most in March 2011 by Christmas spending and increased interest rates have benefited most from stable cash rates," Fitch finance director James Zanesi said.

Source: Sydney Morning Herald



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