There has been a renewed focus in recent weeks on interest-only loans in Australia and the potential risk that these loans present to financial stability, particularly given a large portion of interest-only loans are due to expire in the next few years and tighter lending restrictions have made it more difficult to extend the interest-only period. This may come to a head in early 2020 but our estimates suggest that it won’t be a major issue for the financial sector or the wider economy.
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