Australian banks’ conservative lending practices, together with robust supervision by APRA and the Australian economy’s strong performance since the global crisis, have contributed to a low nonperforming loan ratio compared to other advanced countries (Figures 3 and 4). 5 Despite banks’ high exposure to residential mortgages (56 percent of total loans at end-2010), exposure to high-risk mortgages is small, as less than 10 percent of owner-occupiers had mortgages with loan-to-value ratios higher than 80 percent and debt service ratios greater than 30 percent. 6 Moreover, debt is mainly held by higher income households, with households in the top two income quintiles holding.
