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The financial pressure from paying off a home loan is increasing in Australia.

The proportion of Australian residential mortgages more than 30 days in arrears are at their highest level in three years and will likely climb further, says Moody’s Investors Service.

The ratings agency says the increase in the delinquency rate for May across Australia raises the risk of mortgage defaults and is credit negative for Australian residential mortgage-backed securities.

“Mortgage delinquencies will rise moderately for the remainder of 2016,” Moody’s says.

“Lower commodity prices and the associated slowdown in mining and mining-related sectors will continue to weigh on GDP growth and therefore mortgage performance.”

Moody’s also expects that underemployment, particularly in Western Australia where the mining slowdown had hit the local economy, and the slowing pace of home price growth will constrain mortgage performance for the rest of 2016.

The proportion of residential mortgages more than 30 days in arrears rose to 1.50% in May from 1.34% a year before.

Here’s where mortgage delinquencies are hitting the hardest:

Mortgage performance deteriorated in all eight states and territories over the year to May.

In Western Australia, Tasmania and the Northern Territory, the 30-day plus delinquency rate climbed to the highest levels since Moody’s began keeping records in 2005.

Regions and postcodes exposed to the resource and mining sectors dominated the list of areas with the highest mortgage delinquencies.

“While we expect that mortgage delinquencies will continue to rise, the deterioration in performance should be moderate,” says Moody’s.

“And, while nominal GDP growth will remain below trend, the weaker Australian dollar will continue to support economic growth from services sectors — particularly tourism and education — and mitigate some of the weakness from mining and mining-related sectors.

“Relatively stronger economic performance in service-oriented states such as NSW, Victoria and South Australia will help offset weakness in the mining states of Western Australia, the Northern Territory and Queensland.”

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