Home Stock & SharesBanks Big four banks to curtail interest-only loans immediately

Big four banks to curtail interest-only loans immediately

by Paul
Busting Mortgage Products

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.

Risk Warning:

This article is for information purposes only.

Please remember that financial investments may rise or fall and past performance does not guarantee future performance in respect of income or capital growth; you may not get back the amount you invested.

There is no obligation to purchase anything but, if you decide to do so, you are strongly advised to consult a professional adviser before making any investment decisions.

Related News