lifts interest rates and banks put an end to aggressive cashback incentives, moderating competition. This, according to S“As interest rates continue to rise, refinancing conditions are becoming tougher for many borrowers, particularly those who are more highly leveraged. This is likely to add to arrears pressure because refinancing is a common way for borrowers to self-manage their way out of financial stress.
Prime RMBS arrears rose from 0.76 per cent in December to 0.95 per cent in March to “nudge up against long-term averages”. Non-conforming arrears lifted from 3.2 per cent to 3.7 per cent, but were “unlikely to reach financial crisis peaks”, the ratings agency said.the uptick was “reasonable”, but predicting how much further bad loans would rise was impossible given the dispute around the RBA’s intentions.