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Association slams regulator squeeze on home lending

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Australian Broker | 11 Dec 2014, 05:19 AM Agree 0
The Real Estate Institute of Australia (REIA) has slammed moves by the regulators to clamp down on home lending
  • Paul Sheedy | 11 Dec 2014, 05:05 PM Agree 0
    I think the move by ASIC demonstrates ignorance & naivety at an astounding level. In the UK, unless it has changed in recent years, all mortgage loans are Interest Only. Clearly ASIC has not heard of Offset a/c's, redraws or tax deductible lending compared with non tax deductible lending. Our default rate on Mortgages is still at incredibly low levels - even "Low Doc" loans have a very low default rate. Many clients are buying & selling properties & intelligently choose I/O repayments until one of the properties is sold. This new generation of borrowers have a thing called HECS to also repay, which previous generations did not have. Therefore it may be sensible to chose I/O for say 2-3 years until it is cleared. Don't forget they still have another 27-28 years in which to repay the loan. It was not that long ago that we had maximum terms of 20 & 25 years. I won't be taking my advice from ASIC or APRA anytime soon. Sheeds.
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