$350B of interest only loans ending over next 3 years: RBA- Are you ready for a loan change?

Over the next three years, the RBA estimates about $120B worth of loans annually will have their interest-only period expire. 

The big switch to principal and interest (P&I) loans will test the finances of borrowers who don’t plan effectively for the extra monthly expense.

“Around two-thirds of interest-only loans in the Reserve Bank’s Securitisation Dataset are due to have their interest-only periods expire by 2020”, the Reserve Bank Assistant Governor Christopher Kent. 

The RBA is expecting the transition away from interest-only loans overall to be relatively smooth as it was over the past year. 

That is partly due to households responding to pricing differentials, like taking advantage of historically low interest rates for variable and fixed P&I loans.

Tighter lending standards also played a part in reducing the number of interest-only loans. 

Are you ready for a change?

If you have an interest-only loan, elk corp can help you find a principal and interest loan with a very attractive rate.

Get ready to save money when you make the switch to P&I – our low rates help reduce your interest repayments.

Have a variable rate home loan?

You should seriously consider a fixed rate loan to ensure regular monthly P&I repayments, as variable rates can rise in the near future.

Fixed rate loans usually have lower rates than variable loans, so you can possibly have extra savings on repayments for your loan term.

Contact elk corp to find out how you can start saving on your loan.

READ MORE:

https://www.goldcoastbulletin.com.au/real-estate/queensland/rba-defuses-fears-over-360b-in-interestonly-home-loans-expiring/news-story/0c1aec69dc9f211c28c73ba5e3e30c2e?rsf=syn:news:nca:gcb:article