ING Direct to launch interest-only home loan
ING Direct, Australia’s fifth largest lender, is preparing to offer "never-ending" mortgages that could solve the country’s housing affordability problems.
According to the Sunday Telegraph, the lender will launch a home loan product with no fixed term and no requirement to repay any capital for its duration.
Such interest-only loans would cut repayments on a $300,000 mortgage by $5000 a year, the newspaper said.
Meanwhile, Don Koch, chief executive officer at ING Direct, suggested that the mortgage would be an invaluable option for Australians looking to compare home loans and secure a property.
"People are needlessly being denied the chance to buy a property while prices spiral rapidly out of their reach" he said.
"There is an urgent need to provide more affordable options and borrowers should be able to choose whether they want to repay the capital, or not."
Last week, Dean Rushton, chief operating officer of Loan Market, suggested that banks should help more first-time buyers get into the property market by allowing people applying for a home loan to use rental payments as evidence of genuine savings.
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