Borrowers lose interest in 100pc home loans

ONE of Australia's non-bank lenders has been forced to stop offering controversial 100 per cent home loans, and more are likely to follow.

Borrowers lose interest in 100pc home loans

ONE of Australia's non-bank lenders has been forced to stop offering controversial 100 per cent home loans, and more are likely to follow.

GE Money, which is one of the lenders with the most defaulting homeowners, said it had been told to scrap the loans by its mortgage insurer because they were too risky. Loans for 100 per cent or more of a property's value can help borrowers with no deposit get into the market.

They have also been blamed for contributing to the rise in mortgage defaults, which reached a record 3002 last year, according to Supreme Court records.

Mortgage House of Australia chief executive Ken Sayer said he was considering withdrawing 100 per cent loans from his firm's product range.

"Global appetite for high-lend or high-risk loans has changed,'' he said.

"We foresee a shift towards more conservative lending practices.''

A survey of other lenders, including the big banks, showed that if they offered 100 per cent loans they had no intention of scrapping them.