‘Around 1/3’ of customers 2 years ahead on mortgages: ANZ

Approximately one-third of ANZ home loan customers are two years ahead on their mortgages and 70 per cent are at least one month ahead according to the major bank’s latest report on the country’s housing outlook.

Despite budgetary pressure brought on by inflation and climbing interest rates, ANZ has reported that excess mortgage repayments in 2023 were 21 per cent higher than the 2015–19 average.

In aggregate, the ability of most indebted households to cover expenses has kept savings buffers from eroding, the report stated.

An analysis from the Reserve Bank of Australia (RBA) has suggested that around 94 per cent of households with variable owner-occupier mortgages have sufficient incomes to pay for mortgages and essentials.

More than half of the remaining 6 per cent who are experiencing an income shortfall have over two years’ worth of savings to cover the gap between their income and essential expenses.

The RBA noted that this highlighted how crucial the resilient Australian labour market is to indebted home owner financial stability, as these savings buffers would be “far smaller” without continued employment.

Additionally, delinquencies on home loans have remained low in spite of a 30–50 per cent increase in minimum repayments for the median home loan borrower, however, the major bank noted that personal delinquencies have lifted.

This coincided with data released by the Australian Prudential and Regulation Authority (APRA) that revealed that the non-performing share of loans sits at around 0.78 per cent, remaining at historical lows and well below pre-pandemic levels.

Just over 20 per cent of variable rate borrowers have loan servicing ratios of over 30 per cent, however, variable rate borrowers in the lowest 25 per cent of income earners have seen the share of higher servicing ratios reach over 40 per cent, the RBA estimated.

Stress still at high levels

Despite the majority of home loan customers being able to manage their mortgage repayments, recent emerging data suggested that borrowers are still feeling stressed in that regard.

Over one in three mortgage holders (35 per cent) indicated that they are struggling to pay their home loans as of January 2024, the equivalent of 1.1 million households, according to the recent Consumer Sentiment Tracker survey conducted by Finder.

[RELATED: How are borrowers feeling at peak cash rate?]

Adrian Suljanovic is a journalist at Broker Daily with more than two years experience reporting on all facets of the third party distribution channel.

Adrian has written for a range of business and finance titles including IFA, Investor Daily and Lawyer’s Weekly before joining the mortgages team in 2022.

He graduated from the University of Wollongong in 2021 gaining a Bachelor of Communication & Media with a major in Digital & Social Media.

E-mail Adrian at: This email address is being protected from spambots. You need JavaScript enabled to view it.