Banks face risks from high household debt, overheated property market – Your Mortgage

While recent increases in home-loan interest rates by the Big Four and smaller lenders should help cool growth in lending to more vulnerable buyers, banks still face risks from high household debt and an overheated property market, warned Fitch Ratings.

The Big Four and many smaller lenders have raised interest rates on home loans for owner-occupiers and investors over the last two weeks, in step with each other but of out step with the Reserve Bank. (The RBA has kept the official cash rate at the historically low level of 1.5%.) 

Surging house prices, particularly in Sydney and Melbourne, have raised speculation that the Australian Prudential Regulation Authorit…

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