Cape Town – South African borrowers who have loans in securitised pools typically have stronger credit profiles, according to a report released by rating agency Moody's.
South African borrowers whose mortgage debt is structured into mortgage deals are much more likely to make their regular payments than regular borrowers in the wider market, even if interest rates rise materially, the report reveals.
"We apply stresses to interest-rate increase scenarios, and these show that if interest rates were to increase by about 3%, only an additional 1% of borrowers would have difficulties repaying their mortgages. In fact, rates would have to increase by up to 9%, before affecting an additional 10% of borrowers," said Antonio Tena, a Moody's analyst and co-author of the report.