ANZ clamps down on interest-only loans
ANZ is incentivising borrowers to move to principal and interest payments.
ANZ will enact tighter lending criteria around its interest-only loans, including raising the minimum deposit to 20% for new and increased lending including loan top-ups, according to the AFR.
The bank will also include a minimum room and board or rental expense of $375 per month for borrowers living with their parents. The new expense will apply from Sunday, June 18.
The changes are set to apply from Monday, 29 May. ANZ will incentivise customers to switch from interest-only to principal and interest payments by waiving its renegotiation fee.
In a note to brokers, ANZ said it would continue to lend to existing interest-only customers “where repayments meet their needs and lending falls within our product and credit policy requirements”.
"We continuously review our policies and processes to ensure we meet our objectives of doing the right thing by our customers, meeting community expectations and ensuring we have a prudent and balanced home loan portfolio," the bank said.
In March, ANZ lifted rates on its interest-only home loans. The bank said it would write to interest-only borrowers and offer them the opportunity to move to principal and interest payments.