Australia’s mortgage market has been getting safer

Australia’s mortgage market has been getting safer

Banks have raised their lending standards over the past decade or so, by reducing their volume of low-deposit and interest-only loans.
 
The share of home loans with a loan-to-value ratio (LVR) of 90% or more (i.e. a deposit of 10% or less) fell from 22% in 2009 to 9% in June 2020, according to data from APRA, Australia’s mortgage regulator.
 
Meanwhile, the share of interest-only loans was 46% in 2015, but averaged only 17% of new lending from mid-2017 to mid-2020.
 
That doesn’t mean it’s no longer possible to buy a home with a 10% deposit or take out an interest-only loan – it is. There are still lots of options available for that type of borrower.