only 67 of Australian homeowners may be unaware of the risks associated with interest-only mortgages, with a lack of financial literacy possibly to blame, according to a survey by the Australian Securities and Investments Commission . Interest-only loans offer lenders an initial period when they pay off only the interest on the mortgage, but after that has elapsed, they must pay back the main loan as well, or refinance. The survey data being used by Mr Mott also found only 67 per cent of respondents had been "completely accurate" in their mortgage application, leading Mr Mott to last month suggest $500 billion loans were inaccurate or "liar loans." Analyst Clancy Yeates said customers could face increases of between 30% and 60% at the end of interest-only periods, which could lead to "substantial stress". In 2015 , UBS questioned banks' credit standards in interest-only lending.
only 67 of Australian homeowners may be unaware of the risks associated with interest-only mortgages, with a lack of financial literacy possibly to blame, according to a survey by the Australian Securities and Investments Commission . Interest-only loans offer lenders an initial period when they pay off only the interest on the mortgage, but after that has elapsed, they must pay back the main loan as well, or refinance. Analyst Clancy Yeates said customers could face increases of between 30% and 60% at the end of interest-only periods, which could lead to "substantial stress". In 2015 , UBS questioned banks' credit standards in interest-only lending.