Pete Wargent blogspot

CEO AllenWargent Property Buyers, & WargentAdvisory (institutional). 6 x finance author.

'Must-read, must-follow, one of the finest property analysts in Australia' - Stephen Koukoulas, ex-Senior Economics Adviser to Prime Minister Gillard.

'One of Australia's brightest financial minds, must-follow for in-depth analysis' - David Scutt, Business Insider.

"I've been investing 40 years yet I still learned new concepts; one of the finest young commentators" - Michael Yardney, Amazon #1 bestseller.

'The most knowledgeable person on Aussie real estate - loads of good data & charts, the most comprehensive analyst I follow in Australia...follow Pete Wargent' - Jonathan Tepper, Variant Perception, 2 x NYT bestseller.

'Superlative work' - Grant Williams, founder RealVision.

Wednesday, 26 August 2015

Interest only loans boom

The latest APRA figures showed that loans with redraw and offset facilities have continued to flourish and become more popular than ever before. 

But check these two charts out below. 

Firstly, a massive $44 billion of loans of $96 billion new residential housing loans written in the June quarter were accounted for by interest only products.



And secondly, to put this in its recent historical context, $44 billion reprsents an incredible 45.8 per cent of new loan exposures written.


In summary, it is true that offsets and redraw facilities are included in new loan products more than has ever been the case before.

However, with somewhere now approaching half of new loans written not requiring immediate repayments against the loan principal there appears to be an increasingly heavy reliance on borrowers managing their personal finances responsibly.