Reserve Bank warns about home loan 'complacency'

The South African Reserve Bank has warned banks against "complacency" in granting more home loans to consumers as overdue mortgages start to rise and speculation mounts that interest rates may increase.

Overdue mortgage loans rose 5.5 percent in February from a year ago, after declining last year, the Reserve Bank said in its Financial Stability Report on its website.

"Although not posing a threat to financial stability currently, lenders would be well advised to guard against complacency as experience has shown that the worst loans are made near the top end of the business cycle," the central bank said.

Business Report