APRA Removes Interest-Only benchmark
The Australian Prudential Regulation Authority (APRA) has announced that it will remove its supervisory benchmark on interest-only residential mortgage lending.
By way of background, APRA enforced this requirement as a temporary measure in March 2017 to reinforce sound lending practices. APRA capped the banks to restrict new interest-only lending to 30%.
APRA Chairman Wayne Byres said: “APRA’s lending benchmarks on investor and interest-only lending were always intended to be temporary. Both have now served their purpose of moderating higher risk lending and supporting a gradual strengthening of lending standards across the industry over a number of years.”
What does this mean?
Most banks will no longer be subject to the 30% benchmark on interest-only lending from 1 January 2019 which may result in more competitive investment interest-only facilities on offer.
This may in turn re-ignite the property market!
For more information, reach out to Nick Marks from Cocoon Capital on:
0408 017 686
Or give Zeno Kobica a call on:
0402 000 497.
Good luck in your property investments!
