Borrowers still seeking interest-only loans despite falling house prices and RBA warnings

Borrowers still seeking interest-only loans despite falling house prices and RBA warnings

DAVID ROSS DEC 14, 2018

A high proportion of borrowers are still actively seeking interest-only loans, despite home values going backwards and the Reserve Bank trying to wean Australians off riskier debt. Almost a quarter of investors and one in five owner-occupiers are looking for interest-only loans, according data from comparison site Finder.

Interest-only loans have been used by many to get a foothold in the housing market, or by investors to capitalise on rising prices while minimising payments.

Borrowers are only required to pay the interest of a loan until the end of interest-only period – normally three to five years – at which point they will begin to pay back the principal and interest…. continue reading

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