How the banks have responded to the changes in investor lending
Since the Australian Prudential Regulation Authority (APRA) announced that the annual growth on investment lending must be capped at 10 per cent, many lenders - including the major banks - have increased interest rates on investor loans.
All of the big four banks and some smaller banks, including Suncorp, the Bank of Queensland and ING Direct announced rate rises on investor loans of between 0.27 and 0.3 per cent. AMP went a step further, raising interest rates for existing investors and suspending all new investor lending.
All of the banks have stated that the rate rises were a response to APRA’s 10 per cent growth restriction.
As we see the increases occur, questions are raised around how these changes will affect our clients.
There’s no doubt that applying for finance will become more challenging for new home investors. But it doesn’t mean it’s impossible. A mortgage broker can help assess a client's situation to see what investment products are suitable for them.
There is also the possibility that self managed superannuation funds that look at property investment will be affected, however, owner occupier loans shouldn’t be impacted by the changes.
If you’re working with clients who are looking at investing in property, I’m here to help find them the right home loan option for their personal circumstances.