Digital Finance Analytics (DFA) Blog
"Intelligent Insight"
Analysis released today by Digital Finance Analytics reveals that in the coming 12 months around 124,000 interest only loans will need to be switched to principal and interest loans. This is drawing data from our rolling household surveys. This translates to an estimated value of $47 billion, and represents a significant proportion of all IO … Continue reading “The Interest Only To P&I Problem”
I discussed all this in about 5 minutes on 3AW this morning…
We discuss the latest from Moody’s as they look at the rising risks in Interest Only (IO) loans.
Following on from the SMH article today, The Project also did a segment on the subject, including my comments via a recorded live cross. The issues of mortgage stress and repayments are going mainstream!
The SMH published an article today “‘It’s our version of the GFC’: warning on looming interest-only crisis” which dissects the Interest Only Loan repayment issue, and includes a number of quotes from DFA. Martin North, the principal at consultancy Digital Finance Analytics, said interest-only loans account for about $700 billion of the $1.7 trillion in … Continue reading “SMH Does Interest Only Loans”
From The Conversation. This week’s Australian consumer price inflation figures revealed a 0.4% increase for the March quarter, and 1.9% for the last 12 months. The March quarter figure was below market expectations of 0.5%, and also the previous (December quarter) figure of 0.6%. Education prices were up 2.6% on the quarter, and health prices … Continue reading “Interest only loans are an economic debacle that could bust the property market”
The story so far. Banks were lending up to 40%+ of mortgages with interest only loans, some even more. The regulator eventually put a 30% cap on these loans and the volume has fallen well below the limit. Some banks almost stopped writing IO loans. Source: APRA They also repriced their IO book by up … Continue reading “New Wave Of Cheap Interest Only Loans Hits”
What’s the story with Interest only? Welcome to the Property Imperative Weekly to 24th February 2018. Welcome to the latest weekly digest of property and finance news. Watch the video or read the transcript. Michelle Bullock from the RBA spoke about Mortgage Stress and Investor Loans this week. She argued that, based on HILDA data … Continue reading “The Interest Only Loan Problem – The Property Imperative Weekly 24 Feb 2018”
From Bank Underground. The interest-only product has undergone tremendous evolution, from its mass-market glory days in the run-up to the crisis, to its rebirth as a niche product. However, since reaching a low-point in 2016, the interest-only market is starting to show signs of life again as lenders re-enter the market. The chart shows how … Continue reading “The rise and fall of interest only mortgages”
A segment on ABC 7:30 discussed the problem faced by many interest only mortgage holders as tighter lending standards bite, forcing some to higher payment P&I loans or to sell. We discussed this issue some time back, and made an estimation that $60 billion of such loans are likely to fall foul of the tightening. … Continue reading “7:30 Does Interest Only Loans Problem”
