The outer northern suburbs of Melbourne are emerging as arrears hot spots, S&P Global’s latest quarterly report on Australian home-loan arrears shows. As of September 2023, prime mortgage arrears were 0.92 per cent, which is around their long-term average of 1.00 per cent, S&P said. A year ago, prime RMBS arrears were at a historic low of 0.58 per cent. Non-conforming arrears rose to 3.86 per cent at the end of September from 3.47 per cent in June.  “Non-conforming borrowers are more sensitive to cashflow pressures arising from higher interest rates, given their higher levels of leverage. A slowdown in refinancing activity will also add to debt serviceability pressures for some nonconforming borrowers by keeping them locked into higher rates” S&P said. Investor arrears were 1.06 per cent as of September 2023 compared with 1.37 per cent for owner-occupiers. “Refinancing activity has tapered more recently from its recent peaks,” S&P said. “Refinancing conditions will become harder as debt serviceability hurdles become more restrictive.” S&P listed localities such as Mernda, Wollert, and St Albans (all in Melbourne’s north) and Rowville (in the city’s east) as among suburbs with the worst-performing. In Sydney the worst performing post codes are in the city’s south-west.