Big changes coming soon for interest-only loans
The Australian Securities and Investment Commission is investigating interest-only mortgages. Sydney lawyer Anthony Cordato said mortgage brokers have been “gaming” the interest-only home loan system by only assessing the borrower’s ability to repay the interest and not the principal.
They have been encouraged to do that by lenders said Cordato.
Cordato expects ASIC to recommend that all lenders do what Westpac has done and announce that interest-only loan assessments must be based on principal and interest.
Source: The Adviser