Expiry of 900,000 interest-only loans set for January
If you feel a bit aggrieved by having to move away from a workable interest only loan then you won't be alone. Apparently there are 900,000 loans in the same boat!
New market research indicates about 900,000 interest-only loans will revert to principal and interest payments this month, following a tougher year on the mortgage market for property investor clients.
Comparison site finder.com.au drew this estimate from an analysis of housing finance data from the Australian Bureau of Statistics (ABS).
The expirations follow restrictions from the banking regulator, APRA, on interest-only lending. APRA’s cap saw interest-only loan approvals fall by about 55 per cent in the 12 months to June 2018.
APRA’s restrictions and the revelations of the royal commission also formed part of the reason individuals and businesses alike struggled to secure or extend financing arrangements in 2018.
While IO approvals are dropping, the demand remains strong, according to finder.com.au’s data, which shows that despite house values continuing on its downward slide and the RBA trying to discourage Australians from taking on riskier debt, nearly a quarter of investors and one in five owner-occupiers are seeking IO loans.
For those already in interest-only contracts, the switch to principal and interest could add an additional $400 a month to borrowers’ repayments - or about $5,000 per year - based on current interest rates.
APRA announced plans to ditch its cap on interest-only lending in December last year, taking effect this month.
Business Reporter
04 January 2019
accountantsdaily.com.au
Hot Issues
- Small businesses may ‘collapse under strain of payday super’, IPA warns
- ATO’s hands tied with scrapping on-hold debts, expert says
- What Drives Your Business Growth and Profits?
- Australian Taxation Office (ATO) shifting to firmer debt collection activity
- Why employee v contractor comes down to fine print
- Sharing economy reporting regime for platform operators
- Countries producing the most solar power by gigawatt hours
- Illegal access nets $637 million
- Accessing superannuation benefits.
- Does your business have a company Power of Attorney?
- Labor tweaks stage 3 tax cuts to make room for ‘middle Australia’
- GrantConnect
- 2 in 3 SMEs benefit from instant asset write-off, survey reveals
- Updated guidance on R&D claims
- Do you know how to recover debts?
- Wheat Production by Country
- Types of small business benchmarks
- What is a Commercial Lease?
- ATO warns advisers against suspect R&D tax claims
- The year of workplace law upheaval
- How to Resolve Invoice Payment Disputes
- Raft of revenue tweaks in MYEFO to raise millions
- The Countries that Export the Most Wine in the World
Article archive
- October - December 2023
- July - September 2023
- April - June 2023
- January - March 2023
- October - December 2022
- July - September 2022
- April - June 2022
- January - March 2022
- October - December 2021
- July - September 2021
- April - June 2021
- January - March 2021
- October - December 2020
- July - September 2020
- April - June 2020
- January - March 2020
- October - December 2019
- July - September 2019
- April - June 2019
- January - March 2019
- October - December 2018
- July - September 2018
- April - June 2018
- January - March 2018
- October - December 2017
- July - September 2017
- April - June 2017
- January - March 2017
- October - December 2016
- July - September 2016
- April - June 2016
- January - March 2016
- October - December 2015
- July - September 2015
- April - June 2015
- January - March 2015
- October - December 2014
January - March 2019 archive
- Resources to help understand and implement Single Touch Payroll (STP)
- Big fines, prison on the cards as new SG penalties introduced
- Extra website resources and tools is one way we offer you and your family more.
- FBT Exemption for Various Work Vehicles
- Tax payable on expenditure recoupments
- ATO identifies SMSF contravention red flags
- Who wins dispute about taxable income?
- Australia - facts & figures March 2019
- Strategies to handle scam phone calls and problem e-mails.
- Instant asset write-off threshold upped to $25k
- Jail time for GST fraud
- Correcting GST Errors
- Fuel tax credit rates raised
- ATO set to contact clients for overdue TPAR
- Reminder on Victoria Property Duties
- How Australia is performing.
- Global outlook summary: Down but not out
- Bookkeepers remind on incoming TPRS obligations
- Golden Rules for Deductions
- How's Australia going - vital statistics?
- Tax, SMEs set to be ‘political football’ in 2019 as election nears
- Cap lifted on popular financing option for clients
- Expiry of 900,000 interest-only loans set for January
- Australian Taxation Office (ATO) Scam Alert: Fake Demands for Tax Payments
What our clients say about us