Borrowers in Western Australia are 20 per cent more likely to fall behind on their mortgages, according to S&P Global Ratings, which found home loan arrears rose in the December quarter and are likely to worsen.

While overall major bank arrears remain low – averaging 0.91 per cent of loans across the economy – the Reserve Bank’s 13 interest rate increases and 4.35 per cent cash rate are starting to bite. Roy Morgan, in a separate report on Tuesday, found a record high 1.6 million Australians, or 31 per cent of borrowers, are at risk of mortgage stress.