What is wrong with interest only loans?
It seems that they are nervous about Lenders dishing out too many interest only loans. Interest only loans are deemed as risky, mostly because the repayments will go up once the interest only period has finished and that may cause some people issues.
There are all sorts of reasons why someone might want an interest only loan, but it’s the appropriateness of the loan and the sheer volume of interest only loans these days that is in question.
It’s reported that an ASIC investigation into 140 consumer files from 11 lenders, including the big four banks, revealed:
Nearly one of three files showed the lender had failed to consider if the interest-only loan met the consumer’s requirements;
Banks were not properly assessing the consumer’s real living expenses but instead relying on general benchmarks
The corporate watchdog asserted pressure on the lenders to change their practices and both lenders and brokers must ensure that they fit in with responsible lending obligations.
Finance Allsorts can assist you to set up your home or investment loan in the most appropriate way.
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