Changes are happening - please bear with us while we update our site.

Changes are happening - please bear with us while we update our site. Click here to give us your advice and feedback.

APRA Ends Interest-Only Cap, Big Banks Rise

The Commonwealth Bank of Australia (ASX: CBA) share price is up 0.64% after APRA decided to end the interest-only cap.

The Commonwealth Bank of Australia (ASX: CBA) share price is up 0.64% after APRA decided to end the interest-only cap.

Australian Prudential Regulation Authority (APRA) is the regulator of Australian banks and had previously implemented a 30% cap for banks as to how much of their loans could be interest-only.

APRA ends interest-only cap

APRA has ended the 30% interest-only cap and it has also stopped the 10% growth cap on investor lending.

According to the regulator both of the measures have “served their purpose” considering house prices in the key cities of Melbourne and Sydney are falling by around 1% a month.

Most banks have given APRA assurances that the stronger lending standards will be maintained. We’ll have to see if that is adhered to.

The Australian Financial Review quoted Treasurer Josh Frydenberg saying of the interest-only benchmark it: “was always intended by APRA to be temporary in nature and APRA has determined that it has now served its purpose.”

Are the banks now buys?

I think it’s too early to call that banks are going to turn around yet. Westpac Banking Corp (ASX: WBC) shares are down slightly at the moment and some analyst predictions may be too optimistic.

At this stage it could be better to stick to shares that aren’t under such public scrutiny with proven growth records such as the ones in the below free report.

[ls_content_block id=”14945″ para=”paragraphs”]

$50,000 per year in passive income from shares? Yes, please!

With interest rates UP, now could be one of the best times to start earning passive income from a portfolio. Imagine earning 4%, 5% — or more — in dividend passive income from the best shares, LICs, or ETFs… it’s like magic.

So how do the best investors do it?

Chief Investment Officer Owen Rask has just released his brand new passive income report. Owen has outlined 10 of his favourite ETFs and shares to watch, his rules for passive income investing, why he would buy ETFs before LICs and more.

You can INSTANTLY access Owen’s report for FREE by CLICKING HERE NOW and creating a 100% FREE Rask Account.

(Psst. By creating a free Rask account, you’ll also get access to 15+ online courses, 1,000+ podcasts, invites to events, a weekly value investing newsletter and more!)

Unsubscribe anytime. Read our TermsFinancial Services GuidePrivacy Policy. We’ll never sell your email address. Our company is Australian owned.

Information warning: The information on this website is published by The Rask Group Pty Ltd (ABN: 36 622 810 995) is limited to factual information or (at most) general financial advice only. That means, the information and advice does not take into account your objectives, financial situation or needs. It is not specific to you, your needs, goals or objectives. Because of that, you should consider if the advice is appropriate to you and your needs, before acting on the information. If you don’t know what your needs are, you should consult a trusted and licensed financial adviser who can provide you with personal financial product advice. In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire a financial product. Please read our Terms and Conditions and Financial Services Guide before using this website. The Rask Group Pty Ltd is a Corporate Authorised Representative (#1280930) of AFSL #383169.

Skip to content