Usually, mortgage arrears rise in the first quarter, as households struggle to digest all their Christmas spending over the previous couple of months.

For the first time since 2008, arrears rose in the third quarter (the three months from July 1 to September 30) this year.

The commonality between the two periods is that the RBA’s cash rate had peaked at 7.25% back in 2008, before it was quickly slashed to 3% in response to the global financial crisis.

Of course, in 2023, the cash rate was also rising quickly, having gone from 0.1% in May 2022 to 4.1% in the third quarter (and now 4.35% as of November).

By September 30, 1.12% of “prime” borrowers were at least 30 days behind in their mortgage repayments, up 0.09 of a percentage point in the quarter and 0.41 of a percentage point over the past year.

Ninety-day-plus arrears, basically those likely to be foreclosed, were up 2 basis points to 0.53%.

The news is far worse for “non-conforming loans”, which are those borrowers with less documentation of their income, the self-employed, etc.

Thirty-day arrears for this group jumped 0.46 of a percentage point to 3.45%, while 90-day arrears were up 3 basis points to 1.37%.

While that number sounds large, the 30-day arrears for this group peaked at 20.9% in early 2009 at the peak of the GFC, and averaged 6% in the five years leading up to the pandemic.

Likewise, the arrears rate for prime borrowers is still well below the averages seen prior to the pandemic.

But, then again, they were low before the GFC too.

Mortgage arrears are on the rise, and Fitch says they will increase further as borrowers keep hurting from higher interest rates and rising consumer prices.