The tail end of a so-called “mortgage cliff” is fuelling a rosier outlook for housing delinquencies, as borrowers come to terms with higher-for-longer interest rates.

Popularised early last year, the cliff was used to describe the 880,000 households that would have to refinance mortgages from historically low fixed repayments to far higher variable levels as the Reserve Bank rapidly pushed interest rates upwards to fight runaway inflation. It would add thousands of dollars a month to repayments and trigger housing arrears.