More and more Australian home owners are falling behind on their mortgage repayments, according to the latest data from ratings agency Standard & Poor’s.

The arrears rate on prime mortgages--those that have full documentation on income, savings, and assets--rose up to 1.21 per cent in May from just 1.14per cent in April. The arrears rate on non-conforming loans--those with limited documentation often given to small business owners or contractors who have limited evidence of their earnings--also jumped from 4.25 per cent in April to 4.71 per cent in May.

At the same time that borrowers are falling behind on their mortgages, the national rental vacancy rate for investment property also climbed from 2.4 per cent to 2.5 per cent over the past year, according to data from SQM Research. 

However, this masks the dramatic jump in Perth vacancies from 3.6 per cent last year to five per cent this year due to the mining bust. Asking rents for houses and units are also down 9.1 and 10 per cent over the past year.

“Rents are now down in that city  by 23 per cent over the last three years,” said SQM’s managing director Louis Christopher.

On the national level, house rents averaged zero growth. Meanwhile, unit asking rents rose 3.1 per cent over the past year across all capital cities, with Canberra leading at 10.7 per cent house rent growth and 8.6 per cent unit asking rent growth. The city also posted the largest fall in vacancies from 1.2 per cent to one per cent.

It can be confusing to know whether to get a variable rate or fixed rate mortgage, and what features are important. That's why it's important to not only check the right rates, but make sure that you're getting the right features in your home loan. Get help choosing the right home loan