Home loan arrears are rising, but the RBA isn't too worried. Here's why.
Rates are up since the beginning of 2022 and more borrowers are falling behind on their home loans. For the RBA, the picture is less bleak than it sounds.
Reserve Bank governor Michele Bullock has openly expressed her sympathies for with mortgage holders doing it tough, who have sent her letters detailing their personal financial struggles.
But a new publication from the central bank reveals the RBA is not particularly worried about the steady rise in home loan arrears driven by higher rates and a challenging economic environment.
The fresh research forms a chapter of the RBA’s July Bulletin, a regular publication that provides insights into how its analysts are looking at significant questions about the economy and financial system.
It found that the rate of people falling behind on their mortgage repayments has been steadily increasing since late 2022, following the central bank’s multiple rate hikes in response to a sharp and surprising rise in inflation.
