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Big four banks to curtail interest-only loans immediately

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The big four banks will have to immediately curtail lending activity to the higher risk interest-only segment following a second bout of intervention from the regulator.

On Friday morning the Australian Prudential Regulatory Authority unveiled its second round of macro prudential reforms aimed at curbing excessive house price growth in Melbourne and Sydney by putting the brakes on investor, interest-only and high loan-to-valuation mortgages.

Among the highly anticipated headline measures unveiled by the regulator was a directive for the banks to limit interest-only loans to 30 per cent of total new residential mortgages.

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Paul

The author Paul