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Changes in Australian mortgage ...

Changes in Australian mortgage market

Figures from the Australian Prudential Regulations Authority (APRA) shows that the growth of investors in the country's real estate market is pushing up the number of interest-only and offset mortgages.

Figures from the Australian Prudential Regulations Authority (APRA) shows that the growth of investors in the country's real estate market is pushing up the number of interest-only and offset mortgages.

Data from APRA'S domestic Australian Authorised Deposit-taking Institutions' property exposure for the December 2013 quarter revealed that 34.6 per cent of all mortgagees had a loan with an offset facility - the highest proportion in the history of the index.

There was also a record high in interest-only mortgage loans of 35 per cent - up from 33.8 per cent in the last three months of 2013, reports AustralianBroker Online.

"This is not without risks particularly if housing market conditions or monetary policy settings shift rapidly," said Cameron Kusher, senior research analyst at RP Data.

Interest rates are at all-time low in Australia at present following a number of rate cuts. However, if rates did begin to increase then some buyers could find themselves overstretched.

Posted by Craig Francis.

All information provided is of a general nature only and does not take into account your personal financial circumstances or objectives. Before making a decision on the basis of this material, you need to consider, with or without the assistance of a financial adviser, whether the material is appropriate in light of your individual needs and circumstances. This information does not constitute a recommendation to invest in or take out any of the products or services provided by SMATS Services (Australia) Pty Ltd or Australasian Taxation Services Pty Ltd.

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