Moody's warns on interest-only mortgages
The number of Australians falling behind on their mortgages will rise in the next two years as interest-only loans end and repayments get more expensive, ratings agency Moody's has warned.
Delinquencies on loans that have converted from interest-only to principal and interest are running at double the rate of those still on interest-only, Moody's said in a report released on Thursday.
About 40 per cent of loans by Australian banks in 2014 and 2015 were interest-only for five years, meaning a large portion are set to come under pressure with higher repayments in 2019 and 2020, Moody's said.
