Take care with interest-only loans

The Australian Securities and Investments Commission (ASIC) is coming down on banks for selling interest-only home loans to unsuitable consumers. Eight banks will have to compensate their customers, which could mean ‘tailored’ remediation including a refund of fees or interest.

Peter Kell, deputy chair of ASIC, summarised it this way: “It makes less sense for the “vast majority” of owner-occupiers to buy more expensive interest-only loans”.

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