Interest only loans boom: Pete Wargent
Pete WargentDecember 17, 2020
The latest APRA figures showed that loans with redraw and offset facilities have continued to flourish and become more popular than ever before.
But check these two charts out below.
Firstly, a massive $44 billion of loans of $96 billion new residential housing loans written in the June quarter were accounted for by interest only products.
And secondly, to put this in its recent historical context, $44 billion reprsents an incredible 45.8 per cent of new loan exposures written.
In summary, it is true that offsets and redraw facilities are included in new loan products more than has ever been the case before.
However, with somewhere now approaching half of new loans written not requiring immediate repayments against the loan principal there appears to be an increasingly heavy reliance on borrowers managing their personal finances responsibly.
PETE WARGENT is the co-founder of AllenWargent property buyers (London, Sydney) and a best-selling author and blogger.
His latest book is Four Green Houses and a Red Hotel.
Pete Wargent
Pete Wargent is the co-founder of BuyersBuyers.com.au, offering affordable homebuying assistance to all Australians, and a best-selling author and blogger.