RBA untroubled by interest-only loans hit

(Australian Associated Press)

 

The hit to household budgets that comes when interest-only home loans expire will be a problem for some borrowers but not the broader economy, the Reserve Bank of Australia says.

Minutes of the RBA’s March rates meeting show the bank believes the effect of borrowers having to step up repayments when interest-free periods end “would be significant for some individual households”.

“At the aggregate level, however, the likely increase in loan-related payments would amount to a small proportion of household disposable income and the effect on household consumption growth would be smaller still,” the bank said.

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