Via AFR:
One of the nation’s biggest mutual lenders has cut interest-only loans in half and hiked interest rates by 40 basis points, heralding a tough new phase in attempts to cut back on risky borrowing.
It means borrowers will have to take out two loans for a single property – a minimum principal and interest loan and a maximum interest-only.
Teachers Mutual Bank, which includes UniBank and Firefighters Mutual Bank, is requiring a minimum of 50 per cent principal and interest for all home loans, which means the maximum interest-only is also 50 per cent.
A new borrower seeking $300,000 will have two loans – a minimum of $150,000 on principal and interest and a maximum of $150,000 on interest-only.
In addition, borrowers cannot draw down any cash from any loan where part of the total borrowing is interest-only and scrutiny of ability to pay has been toughened.
Craaaack….
