Interest-only mortgages are booming in popularity

Efforts to rein in high-risk mortgage lending have been largely successful. The Australian Prudential Regulation Authority reported that growth in investment lending has slowed and the proportion of high loan-to-valuation ratio loans is down and low-doc lending has declined.

However there has been an increase in the proportion of interest-only home loans in new mortgage lending last year. Interest-only loans now comprise over 41 per cent of new mortgages, up 8 per cent from last year.

Source: Banking Day