March 30, 2017 / 10:02 PM / 8 months ago

Australia's bank regulator clamps down on interest-only mortgage loans

SYDNEY, March 31 (Reuters) - Australia’s banking watchdog on Friday said it would place limits on interest-only residential loans to reinforce sound mortgage lending practices in a hot property market.

New interest-only lending will be limited to 30 percent of total new residential mortgage lending, whereas it stands at around 40 percent at present, the Australian Prudential Regulatory Authority (APRA) said.

Fitch Ratings said on Wednesday that the country’s banks faced risks from high household debt and an overheated property sector. (Reporting by Jamie Freed, editing by G Crosse)

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