Curbs on interest-only home loans start to bite in Australia

A man waits at a bus stop next to a sign advertising bank interest rates for home loans in Sydney on Oct 7, 2014.
A man waits at a bus stop next to a sign advertising bank interest rates for home loans in Sydney on Oct 7, 2014. PHOTO: REUTERS

SYDNEY (BLOOMBERG) - Regulatory curbs aimed at slowing the growth in riskier property lending in Australia are starting to bite.

The proportion of new lending to interest-only borrowers fell to the lowest level in more than eight years in June, according to data from the Australian Prudential Regulation Authority.

The regulator in March sought to cap such loans, traditionally favored by property investors, at 30 per cent of total new residential mortgages.