Mortgage arrears for Australian homeowners have reached a three-year high as interest rates remain steady after several years on the rise.
The insight comes from new CoreLogic figures on Thursday which revealed arrears reached 1.6 per cent in the March quarter of 2024.
This figure is the highest arrears have been since the first three months of 2021.
The average variable interest rate on outstanding owner occupier home loans increased from 2.86 per cent in April 2022 to 6.39 per cent in March 2024.
CoreLogic research director Tim Lawless said the end is not yet in sight for Australians struggling to meet their mortgage repayments.
"It's likely mortgage arrears will rise further as unemployment lifts, household savings deplete further and, more broadly, economic conditions navigate a period of weakness," he said in the report.
"However, arrears are unlikely to experience a material 'blow out' unless labour markets weaken substantially more than forecast."
The rise in rates have added nearly $1600 in monthly repayments for the average borrower with a $750,000 debt.
Upwards trends in arrears has been most influenced by non-performing loans, where the arrears rate has risen to 0.93 per cent.
A non-performing loan is one that is at least 90 days past due or where the lender expects it won't be able to collect the full amount due.
This figure is now slightly higher than it was at the onset of COVID-19 at 0.92 per cent and above the series average of 0.86 per cent.
The fresh insight follows the Reserve Bank of Australia's decision to keep interest rates on hold in June on Wednesday.
A failure to bring inflation down fast enough could leave mortgage-holders waiting longer for rates cuts, with some economists warning a hike could be on the cards if the June quarter price statistics come in uncomfortably high.
The consumer price index rose 3.6 per cent in the March quarter, above the two to three per cent range targeted by the central bank but well down from the 7.8 per cent peak logged in the year to December 2022.
