In its latest series of housing market analyses, Fitch Ratings has concluded Australian banks' tightening of mortgage underwriting in 2015 was "largely due" to regulatory intervention. Fitch said the regulatory focus has been on mortgages for investors and interest-only loans, and both these types of home mortgages experienced a sharp fall as a proportion of loans approved in the September 2015 quarter. A reduction in higher loan-to-value ratio mortgages has also been a trend evident since 2014, Fitch said. However, quarterly approvals continue to be well above net loan growth, implying borrowers continue to take advantage of low rates to pay down mortgages ahead of schedule."This continued increase in household indebtedness, however, contributes to rising macroeconomic risks, and suggests households have used low interest rates to take on more debt," the ratings agency noted. House-price growth in Sydney and Melbourne remains high, despite some early signs of moderation since mid-2015, said Fitch.And, although the regulatory limit of ten per cent growth in investor mortgages is effective, it may have the counter-intuitive effect of leading to looser underwriting for the owner-occupier segment as banks search for growth."Risks have built within the mortgage portfolios over the past 24 months, leaving the portfolios more susceptible to a significant increase in unemployment or a sharp rise in interest rates," the ratings agency said, before adding: "neither [of these options] is our base case."More likely are higher funding costs for lenders, due to the expectation of higher US interest rates, which may lead to an increase in mortgage pricing.