Bloomberg News

Australia’s Mortgage Stress Jumps as Costs Rise, Genworth Says

September 20, 2011

Sept. 21 (Bloomberg) -- A quarter of Australian borrowers are struggling to make mortgage payments, hit by rising living costs, higher interest rates and existing debt, according to mortgage insurance provider Genworth Financial Inc.

The number of Australian homeowners facing mortgage stress has jumped from 21 percent in June, Genworth said in its September Homebuyer Confidence Index, based on surveys conducted from July 30 to Aug. 5, and released today.

“Cost of living pressures are weighing heavily on borrowers’ minds,” said Ellie Comerford, chief executive officer at the Australian unit of the Richmond, Virginia-based company, which insures mortgages by banks.

About 85 percent of borrowers are still managing to make mortgage payments on time, and more than 45 percent have overpaid their mortgages over the past year, Genworth said. First-time homebuyers in particular are cutting back on luxury goods, clothes and groceries to own their homes, the group said.

--Editors: Linus Chua, Andreea Papuc

To contact the reporter on this story: Nichola Saminather in Sydney at nsaminather1@bloomberg.net

To contact the editor responsible for this story: Andreea Papuc at apapuc1@bloomberg.net


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