Australian bank regulator to remove cap on interest-only mortgages

SYDNEY, Dec 19 (Reuters) - Australia’s banking regulator said on Wednesday it was removing a cap on interest-only loans for residential property on the grounds that the measure had reached its objective of curbing higher-risk lending practices.

The Australian Prudential Regulation Authority (APRA) said IT would remove the cap on Jan. 1 after it “led to a marked reduction in the proportion of new interest-only lending, which is now significantly below the 30 percent threshold”.

APRA introduced the limit in March 2017 amid concerns about a housing bubble. Residential property prices in Australian major cities have since fallen the most in three decades. (Reporting by Byron Kaye)