For instance, about 40 per cent of borrowers is on low fixed interest rates. Only a small portion of these loans will come to term this year. The bulk of these fixed loans roll off in a year to 18 months, which is when these customers will feel the full onslaught of higher rates. And there remains a sizable rump that rolls off in 2024 - by which time there is a likelihood the RBA would have begun easing rates again.

Add to this the fact that 78 per cent of home loan borrowers are ahead with their payments and a third of customers are two years ahead.

But there is also 26 per cent who are less than three months ahead - a buffer that could be quickly eroded with rates rising.

In total, CBA mortgage customers have $64 billion sitting in offset accounts - $19 billion more than there was before the COVID-19 pandemic.

Over the past year, the bank has also increased its serviceability buffers such that new borrowers will need to demonstrate an ability to service a loan with an 8.3 per cent interest rate.

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In addition, the average home-loan size has fallen from almost $400,000 to $375,000 in the space of six months.

That said, the proportion of applicants borrowing at capacity has risen slightly but remains at a relatively low 8.7 per cent. The remainder have additional capacity to borrow.

And the biggest group of home loan borrowers are those earning between $200,000 and $500,000, and within that band, more was lent to investors than owner-occupiers.

At June 2022, 0.4 per cent of the combined value of all mortgages was in negative equity - which means the amount of the loan is greater than the value of the property it is secured against. Most of these come from Western Australia.

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While this has been falling and, as such, is a positive, the continued decline in house prices, expected to be about 15 per cent from peak to trough, will result in an increase in negative equity. And more than half of the value of home loans are sitting at a loan-to-value ratio of less than 60 per cent, which means borrowers have a comfortable equity buffer.

This explains why the level of arrears has been trending down over the past two years.

That said, the numbers provided by CBA are a snapshot of where it is today.

By the time we reach peak rates, the picture won’t look as rosy for borrowers.

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CBA said it has provisions to deal with what it anticipates will be the most likely scenarios around rates, economic growth, the decline in the value of housing and an increase in unemployment.

Over the coming months, the economic picture will become clearer as will the degree of fallout from higher rates and a slower economy.

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