Interest rates on interest-only to come down soon? blog post image

Interest rates on interest-only to come down soon?

Facebook Twitter LinkedIn Mail Us

Several lenders may have overreacted in their interest-only loan repricing that APRA’s crackdown on investor lending could turn the other way in the coming weeks.

The APRA has set new policies restricting interest-only loans to 30% of new residential mortgage lending and it has successfully done so. To slow down interest-only loans by property investors, the banks increased their rates for interest-only loans.

However, lenders may still have had a good margin between what they are lending and APRA’s cap after hiking the prices too sharply. If so, interest-only loans may come back very soon. Other lending products may have been filling the gap left by interest-only products.

Supply in Melbourne and Brisbane CBD may be more than the demand but there is still growth. House prices in Sydney, Melbourne and Brisbane may grow about 5% on an annual basis in the next 1 to 2 years and 20,000 housing units may be needed every year to accommodate the growing population.

According to Mortgage Choice, their loans have grown to a record $53.4 billion as have their settlements which rose to $12.3 billion in the year. Commission for new loans also increased to $75.1 million.

The biggest challenges for housing affordability are first-home buyers trying to get into the market and more infrastructure and investment needed to develop regional cities. The mortgage amount is often less than a rental fee so there could be a solution to getting more people out of renting and owning their own homes.

What can you do?

If you would like to know more about property investment, investor lending and interest rates, you can click here to know more about Chan & Naylor services. You can leave your details here and we can schedule you for a free consultation. We’ll contact you to explain more.

Whether you are a beginner, seasoned investor or business owner, we can give you guidance to maximise the financial areas of your life. We can give you an integrated and tailored solution for your superannuation, taxation, property investment, asset protection, estate planning and more.

Click here to schedule a chat or call any of our local offices near you.

If you like what you are reading, subscribe to our newsletters now at or follow our Facebook page here.


Photo: Flickr

Related:  Reserve Bank of Australia - Budget Day Decision

To view the original article, click here

Leave a Reply

Your email address will not be published. Required fields are marked *

Join our mailing list today!

Keep up to date with our latest news & updates!