Banks are under pressure to make it harder to get a loan – and after 10 June it is going to get harder.
The Australian Prudential Regulation Authority (APRA) has told the banks that they need to stop approving so many interest only loans.
As a result many lenders are saying that from 10 June, they will only lend 80 per cent of a property’s value if they want an interest-only loan.
APRA has told the banks to limit the flow of new interest-only lending to 30 per cent of total new residential mortgage lending.
If you think you need an interest only loan, you need to get your skates on; some lenders have already implemented these more conservative policies – and the rest are bound to follow suit.
Westpac and ANZ implemented their more conservative policy for interest only loan in May – you can no longer walk up to any-old branch for an interest-only loan. Talk to your Chan & Naylor Broker now.
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*Photo from flickr