Risky Aussie loans fuel record home prices

[SYDNEY] Australia's biggest banks, whose lending standards helped the nation avoid a property crash during the global credit crisis, are raising concern with home loans helping to fuel record house prices.

The proportion of mortgages that represented more than 80 per cent of a home's value - the loan-to-value ratio (LVR) - rose in the third quarter to the highest since the second quarter of 2009, data from the banking regulator show.

Mortgages in which borrowers pay only interest also increased to the highest in at least five years, according to the figures.