SYDNEY, March 31 (Reuters) - Australia's banking watchdog on Friday said it would place limits on interest-only residential loans to reinforce sound mortgage lending practices in a hot property market.
New interest-only lending will be limited to 30 percent of total new residential mortgage lending, whereas it stands at around 40 percent at present, the Australian Prudential (LON:PRU) Regulatory Authority (APRA) said.
Fitch Ratings said on Wednesday that the country's banks faced risks from high household debt and an overheated property sector.