The number of delinquent housing loans underlying Australian prime residential mortgage-backed securities increased in January to 1.29 per cent. This was a step up from the 1.15 per cent recorded for December, according to a recent report by S&P Global Ratings. Despite the increase, arrears levels in January remained close to long-term averages."Arrears typically increase between November and April, affected by spending on Christmas and summer holidays," S&P said. "However, the magnitude of the month-on-month increase in January 2017 was higher than in previous months."Standard & Poor's added that the category for 31 to 60 days in arrears showed the largest increase which, it said, was a suggestion that more borrowers have fallen behind on their loan repayments for the first time. The trend was broadly consistent among all loan originators, while mortgage arrears rose in every state and territory in January from the previous month. "Although mortgage arrears have increased, even at these levels we do not believe it is likely to affect our ratings on most Australian RMBS, particularly the senior tranches" said S&P. Relatively stable employment conditions are a key support of the current low levels of defaults and losses in RMBS transactions.