From a release by Fitch Ratings:

  • Says that the RBA’s 6 August 201 3interest rate cut is unlikely to have a significant impact on the performance of existing Australian mortgages
  • Past cuts have had a marginal diminishing impact on mortgage performance
  • Cuts between October 2011 and September 2012 saw Fitch’s measure of mortgage delinquency, known as the Dinkum Index, falling from 1.6% to 1.4%. More recent cuts have however seen only marginal benefit in terms of reduction in delinquent and defaulting mortgages, with current mortgage delinquencies as measured by the Dinkum Index being 1.48%.
  • Fitch believes unemployment to be the key variable in driving current mortgage performance in Australia
  • The current interest rate environment may stimulate house prices together with lending and the economy in general

The report was released by Fitch at 2300GMT on August 11 and has so far had little impact on the AUD/USD