Changes to Investment Lending – What you need to know.
Recently lenders have been tightening their criteria on lending for investment purposes. But what does this mean for you?
These changes are taking place due to APRA’s concern around the rapidly growing investor market, which, according to statistics, has been growing steadily year on year, more than double the rate APRA would like to see.
So whether you are a seasoned Investor or you are looking to purchase your first Investment property, most of the lenders in the market have changed their policy around lending for investment purposes, making it more difficult to get into this market.
Some of the changes we have seen already include:
- Maximum LVR (Loan to Value Ratio) for Investment Loans decreasing to 80
- Lenders no longer offering additional discounts on interest rates for Investment Loans
- Some Lenders have increased their interest rates for Investment Loans
- Tougher assessment of whether the applicant can service the loan – leading to lower borrowing capacity
- Decreasing the parameters around Interest Only loans
So does this mean that owning an Investment Property is now out of reach for you? Not necessarily – but it’s now so much more important to utilize the services of a Finance Broker to guide you through the recent changes and find the right lender for your situation.