ING Direct, Australia's fifth largest lender, is preparing to sell loans that have no fixed term and no requirement to repay any capital along the way.Remember how well this worked for us? For what it's worth, the correct way to never have to repay capital is to rent. This sounds more like indentured servitude than progress. Next thing you know we'll be voting-in feudalism. This is totally going to end in tears.
Repayments would be kept to a minimum, allowing borrowers to benefit from capital growth in their property.
"People are needlessly being denied the chance to buy a property while prices spiral rapidly out of their reach" ING Direct CEO Don Koch 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."
Mr Koch wants to position the bank as 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.
Tuesday, May 25, 2010
2004-2007 Redux: Crisis officially wasted, history on schedule to repeat
Revealed: The home loan that could save you a fortune: