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Australia's bank regulator clamps down on interest-only mortgage loans

Published 31/03/2017, 09:02 am
© Reuters.  Australia's bank regulator clamps down on interest-only mortgage loans
PRU
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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.

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