Thousands of borrowers could be in breach of mortgage contracts | The Business | ABC News

There are warnings that tens of thousands of households could be breaching their mortgage contracts by ditching their home insurance. A report by the Actuaries Institute found 1.6 million homes around the country were experiencing "extreme home insurance affordability pressures", which means they were paying more than a month's worth of pre-tax household income on insurance. The Actuaries Institute report calculated that180,000 of those households under extreme home insurance affordability pressures had mortgages, which was about 5 per cent of households with home loans. Many of the group under extreme pressure are likely to have ditched home insurance, which comes with a huge risk as it places a borrower in breach of their mortgage conditions. APRA chair John Lonsdale said it's "a very real issue and a growing issue for the country." It also poses a risk to the banking sector. Households are also facing pressure from high interest rates. The RBA is meets in December but is widely expected to leave the cash rate on hold.
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