Average home loan loss doubles in a year

The size of the average home loan loss suffered by banks – based on claims paid by lenders mortgage insurance company PMI in Australia and New Zealand – doubled to $44,000 in the nine months to September 2005, up from $22,000 in the nine months to September 2004. The incidence of loans in default is no worse than reported by PMI in recent quarters, with the ratio steady at a tiny 0.13 per cent of the almost one million home loans on which PMI provides mortgage insurance. And the ratio of loans in default to claims paid on such loans is also trivial, with fewer than five per cent of loans in default – all of 56 individual loans – leading to claims being paid.