By Stephen Johnson For Daily Mail Australia
Published: 06:08 GMT, 3 December 2019 | Updated: 06:13 GMT, 3 December 2019
More Australians are expected to struggle repaying their mortgage next year, despite record-low interest rates.
Australia's household-debt-to-income ratio already stands at a 190 per cent, which is second only to Switzerland.
American credit ratings agency Moody's Investors Service has this week issued a note predicting a rise in delinquencies, where a home borrower is a month or more overdue with their mortgage repayments.
A leading global credit ratings agency fears Australian mortgage arrears will increase in 2020 because of record-high debt. Australia's household-debt-to-income ratio already stands at a 190 per cent, which is second only to Switzerland (stock image)
It said the number of struggling Australian borrowers would 'increase moderately over the next year, given the muted economic environment, high household debt and, to a lesser extent, the conversion of interest-only mortgages to principal and interest loans'.
In 2020, more than 150,000 borrowers are set to see their mortgage repayment levels surge by an average of $6,300 next year.
In 2015, interest-only loans comprised 41.4 per cent of all home loan approvals, Australian Prudential Regulation Authority data showed.
Those who took out an interest-only loan four years ago are set to be squeezed next year as they are