Via AFR:
Westpac is following interest-only loan rate rises with new clamps on consumer credit, including restrictions on the number of dwellings on a title and tougher conditions for parent loan guarantees.
The changes, which are expected to be rolled out over coming days, are being blamed on regulatory pressure to slow interest-only loans because of concerns their popularity could undermine the nation’s financial stability if rates rapidly rise or economic conditions deteriorate.
Westpac is also offering more attractive rates for borrowers that switch from interest-only, where principal payments are deferred for a specified term, to principal and interest, which allow simultaneous repayment of both.
“The Australian Prudential Regulation Authority recently announced new measures to slow the growth of interest-only lending to 30 per cent across the banking sector,” the bank claims in a message to mortgage brokers, which are a major source of distribution. “To meet this new regulation, we are making changes,” it states.
Drip, drip, drip.
