Mortgages no longer sit atop the payment hierarchy, as distressed consumers are 19% more likely to pay their auto loans first, according to FICO's inaugural Score Credit Insights report released Tuesday. Mortgages had previously held the top spot from 2020-22.
For consumers with open auto loans and mortgages, the 90-plus-day delinquency rate from 2023-25 was 2.6% for auto and 3.1% for mortgages. Mortgages were still 56% more likely to be paid than personal loans, which are 64% more likely to be paid than bankcards. Student loans slotted in at the lowest rank.
"We're seeing a reordering of payment priorities, with auto loans now surpassing mortgages at the top and student loans at the bottom," said Tommy Lee, senior director of Predictive Scores and Analytics at FICO. "This shift highlights how consumers are making strategic choices to protect essential assets and manage their financial obligations. These insights help lenders better understand evolving behaviors and support consumers with more tailored solutions."
Cars and homes are often necessary to borrowers' lives, and thus receive higher priority; both are also secured loans. But one reason auto loans rank first is because its monthly payments are generally lower and homes are harder to repossess, the report said.
Among consumers with a credit score 700 or higher, mortgages remained atop the payment hierarchy. Since higher-scoring consumers are more likely to make their payments than lower-scoring consumers, their hierarchy more reflects a consumers' desire to keep a loan in good standing rather than which they can afford, according to the report.
Delinquency rates among auto loans, mortgages and bankcards all saw significant increases since 2021, while personal loan delinquency declined due to stricter underwriting. Mortgages experienced the largest jump of the group at 58%, although still below pre-COVID levels, while bankcards and auto loans rates rose 48% and 24%, respectively.
For mortgages specifically, 30-day delinquency rates hit 4.7%, 60-day increased to 2.2% and 90-day came in at 1.5% in April, all up significantly from 2022, but still at or below April 2019 levels.
Mortgage balances have also risen as home prices have increased due to low supply. Lower-scoring consumers have seen the greatest spike with a 39% increase since 2019, which outpaces inflation by 13 percentage points.
