Interest-only reset to face double-shock

Wednesday, 28 February 2018

Via the AFR:

Borrowers with hundreds of billions of dollars in low cost interest-only loans could be facing a “double whammy” as reset of their loans coincides with expected interest rate rises, analysis reveals.

It could be even trickier for interest-only borrowers, such as off-the-plan apartment investors that have not repaid any of the loan principal, and whose properties have fallen in value during their one, three, or five year fixed rate terms.

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About the author

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.