Mar
30
Australia Regulator Tightens Loan Curbs to Cool Home Prices
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Banks to limit interest-only loans to 30% of new mortgages
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Lenders to place ‘strict’ limits on LVRs of more than 80%
Australia’s banking regulator has further tightened lending restrictions amid concern runaway home-price growth may stoke a housing bubble.
Under the new curbs, home lenders will have to restrict interest-only loans to 30 percent of total new residential mortgages, the Australian Prudential Regulation Authority said in a statement Friday.
Interest-only loans, which are favored by borrowers taking advantage of tax-breaks on property investments, account for almost 40 percent of residential mortgages, which APRA said is “quite high” by international and historic standards…