Credit rating agency Fitch has warned that losses on mortgages are set to rise in 2016, but that tightened lending restrictions will moderate the increase.
Fitch's Dinkum RMBS Index report, which tracks loans bundled up and sold on to other institutions, forecast an increase in the loss rate from 0.02 per cent as property price growth slows.
"(But) the introduction of measures, such as interest-rate floors, means borrowers should have more buffers to withstand increases in interest rates and unemployment, and a slowdown in the housing market," the report said.
The report found actual mortgage arrears in Australia were at their lowest fourth-quarter levels since 2005, falling by 20 basis points to 0.95 per cent.
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