PHOTO: Some Australians may be forced to sell their home as their mortgage changes to include the principal. Photo: iStock
Thousands of home buyers could be forced to sell their home as they find themselves under financial strain when the interest-only period of their mortgages comes to an end.
Interest-only loans are usually offered for five years by Australian lenders, meaning those who borrowed in the 2015-16 calendar year will now have to pay the principal (the actual loan amount) plus interest when the change kicks in over the next year.
Around 730,000 interest-only loans will switch to principal-plus-interest this year across the country, an analysis of data by finance comparison service Finder has found.
That equates to around $292 billion in mortgages.
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