By: Staff Reporter
In a bid to make home ownership more affordable, ING DIRECT is gearing up to launch an interest only home loan product with no fixed term or capital payment required.
Speaking at a retail lending conference last week, the bank’s chief executive officer Don Koch said, at current rates, the interest only loan would cut loan repayments by $5,000 a year on a $300,000 mortgage.
"People are needlessly being denied the chance to buy a property while prices spiral rapidly out of their reach" he said.
"There is an urgent need to provide more affordable options and borrowers should be able to choose whether they want to repay the capital, or not."
The loan, which is already popular in Europe and the United Kingdom, will allow borrowers to build wealth throughout their life.
According to Mr Koch, ING DIRECT is dedicated to becoming a "mortgage partner for life", with borrowers carrying the same interest-only loan from property to property for as long as they wish, accumulating equity from rising house prices as they go.