ASIC has provided an update on its targeted review of interest only home loans examining whether lenders and mortgage brokers are inappropriately recommending more expensive interest-only loans. Background.
The first stage of ASIC’s review, which involved data collection from 16 home loan providers (including large banks, mid-tier and smaller banks, and non-bank lenders) found that the lenders provided $14.3 billion in interest-only loans to owner-occupiers in the June 2017 quarter, down from $19 billion in the September 2015 quarter.
ASIC’s interest-only lending review has also found:
- Borrowers who used brokers were more likely to obtain an interest-only loan compared to those who went directly to a lender;
- Borrowers approaching retirement age continue to be provided with a significant number of interest-only owner-occupier loans
In the second stage of ASIC’s review it will review individual loan files from both lenders and mortgage brokers.
