Home News Banks trimming down interest-only loan approvals

Banks trimming down interest-only loan approvals

Font size :

Banks are trimming down interest-only loan approvals due to stricter lending rules.

The stricter lending environment has resulted in a significant reduction in interest-only loan approvals over the past quarter, according to figures from the Australian Prudential Regulation Authority (APRA).

Citing APRA’s data, Nestegg.com.au reported that interest-only loans declined by 54.9% over the last quarter. As a result, interest-only loans now make up 16.2%, or $61.2bn, of new home loan approvals. For the first six months of the year, the total value of new home loans sat at $94.6bn, which is 4.1% lower than last year.

Investor home loan approval growth also decelerated during the quarter by 12.4%. Investor home loans account for 31.1% of new home loans, representing $117.5bn.

Meanwhile, owner-occupier loan growth sped up, growing by 4.3%. Owner-occupier lending now takes up 68.9% or $260.6bn of new home loan approvals.

New figures also showed that the number of mortgage applications with a loan-to-value ratio of more than 80% has already declined. Mortgages with LVR of over 80% and less than 90% have fallen by 6.2% while loans with greater than 90% LVR have significantly deflated by 12.2%.

Overall, banks were not too easy on loan applications over the quarter, as approvals declined by 1.5%.

It can be confusing to know whether to get a variable rate or fixed rate mortgage, and what features are important. That's why it's important to not only check the right rates, but make sure that you're getting the right features in your home loan. Get help choosing the right home loan

Mortgage News and Articles

The Keys to Performing a Proper Property Inspection The Keys to Performing a Proper Property Inspection

A property inspection is key when you're serious about buying a home or property, but how do you know what to look for? Read more

Aussie home loan market gets shot in the arm from US private equity Aussie home loan market gets shot in the arm from US private equity Non-bank lenders' growth cushioned the impact of reduced credit on home prices ... Read more

Number of First Home Buyers hits six-year high Number of First Home Buyers hits six-year high FHBs are now entering the market in numbers not seen since 2012 ... Read more

What could cause a 20% home price decline in Sydney, Melbourne? What could cause a 20% home price decline in Sydney, Melbourne? The downtrend will impact dwelling construction and would likely reduce credit growth ... Read more

More mortgage news and articles

Sponsored Links

Sunday, Oct 21, 2018
Top Featured Rates
Top Bank Rates

Get help choosing the right home loan

Let us help you find the right home loan for your needs.

Tell us a bit about your circumstances:
  • Purpose of mortgage
  • Household Income
    $
  • How much do you want to borrow?
    $
  • How much deposit do you have?
    $
  • How much is your house worth?
    $
  • How much do you still owe on your mortgage?
    $
  • What type of mortgage do you have?


  • How much is your new home?
    $
  • How much do you want to borrow?
    $
  • How soon do you want a mortgage?
Next
  • First name
  • Last name
  • Where do you live?
  • Phone number

Special Offers

Related Keywords