Victoria's mortgage delinquency rate is the highest it's been since 2005, and in New South Wales the highest since 2013, while Western Australia took out top spot overall with a rate of 3.33%.

For suburbs, Ballajura (6066) in Perth's North-East has a mortgage delinquency rate of 7.13% as of May 2020.

The only non-Perth areas in the top ten are Ashcroft (2168) in Sydney's South-West in second place at 5.82%, and Australind (6233) in Bunbury, WA in tenth spot at 4.38%.

In the top 20 postcodes for mortgage delinquencies (i.e. behind on payments by 30 days or more), 16 are Western Australian, and all have delinquency rates 4% or higher.

By contrast, just one Perth suburb is a top-20 performer - Floreat (6014) in Inner-Perth at 0.58%.

The worst-performing suburb with the biggest uptick in delinquencies compared to May 2019 is Bayswater (6053) in Perth's North-east, up 2.26 percentage points. 

Buying a home or looking to refinance? The table below features home loans with some of the lowest variable interest rates on the market for owner occupiers.

Update resultsUpdate
LenderHome LoanInterest Rate Comparison Rate* Monthly Repayment Repayment type Rate Type Offset Redraw Ongoing Fees Upfront Fees LVR Lump Sum Repayment Additional Repayments Split Loan Option TagsFeaturesLinkCompare
6.04% p.a.
6.06% p.a.
Principal & Interest
Featured 4.6 Star Customer Ratings
  • No monthly or ongoing fees
  • Unlimited free redraw
  • No application fee
5.99% p.a.
5.90% p.a.
Principal & Interest
Featured Apply In Minutes
  • No application or ongoing fees. Annual rate discount
  • Unlimited redraws & additional repayments. LVR <80%
  • A low-rate variable home loan from a 100% online lender. Backed by the Commonwealth Bank.
6.09% p.a.
6.11% p.a.
Principal & Interest
Featured Unlimited Redraws
  • No annual fees - None!
  • Get fast pre-approval
  • Unlimited additional repayments free of charge
  • Redraw freely - Access your additional payments when you need them
  • Home loan specialists available today
Important Information and Comparison Rate Warning

Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to be made on variables as selected and input by the user. Some products will be marked as promoted, featured or sponsored and may appear prominently in the tables regardless of their attributes. All products will list the LVR with the product and rate which are clearly published on the product provider’s website. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of . View disclaimer.

Meanwhile, the bulk of the top-performing postcodes are in Sydney and Melbourne, while Holland Park and Chelmer (4068) in Brisbane are the two best performers overall, with delinquency rates of just 0.18% and 0.15% respectively.

Australia-wide, the delinquency rate is 1.99%, and Moody's predicts this to increase in the coming months.

"Mortgage delinquency rates will continue to increase over the next year, given the ongoing economic fallout from the coronavirus," Moody's Investors Services vice president Alena Chen said.

"Economic conditions will remain uncertain, driving delinquencies higher. The economic recovery will be tenuous over the next year, with labour and housing markets remaining soft and government and lender support measures ending.

"Over the next year, mortgage delinquency risks will be high in regions with large economic and labour market dependence on industries such as tourism, hospitality and retail, which have been hit hard by coronavirus disruptions."

Moody's Investors Services' report also said household incomes will come under pressure when JobKeeper and the increased rate of JobSeeker end next year.

What's the bigger picture?

Mortgages coming off deferral can be considered 'delinquent', and half have resumed payments as of October.

Excess delinquencies can affect credit at the wholesale level, and investors' appetite in the mortgage-backed securities (RMBS) space.

Statistics as of August indicate 5-10% of loans in 'prime' RMBS portfolios are deferred, while 'non-conforming' i.e. sub-prime, that figure is 10-20%. 

Poor investments can lead to credit freezes, which can impact the availability of home loans to new borrowers - similar to what was seen during the Global Financial Crisis.

However, compared to the United States during the GFC, delinquency rates are incredibly low. 

Moody's-rated default rates in the US during the crisis (typical defaults are mortgages delinquent by nine months or more) hit 9.7%. 

Standard and Poor's-rated default rates hit nearly 13%. 

Ready, Set, Buy!

Learn everything you need to know about buying property – from choosing the right property and home loan, to the purchasing process, tips to save money and more!

With bonus Q&A sheet and Crossword!

By subscribing you agree to our privacy policy