Investor Rates – the new landscape
For those who have an investment property loan, you are undoubtedly aware by now, that APRA (the Australian Prudential Regulatory Authority have hit the lenders with a proverbial ‘stick’ in 2016 for growing their investment books too quickly. It is their job to ensure our banks remain resilient and follow the rules.
Thus, the banks were told to tighten their investment lending policy and to raise more capital, particularly within their investment lending portfolio. Because they are under strict instruction by APRA, our banks lifted investor interest rates during 2016 and many are now charging a premium on interest only loans, too.
The simple facts around this are that it now costs more than it did last year, to hold an investment property. It has also meant that it’s becoming harder for investors to purchase their second or third property because at the same time, the banks have changed how they assess your power to borrow if you have existing debt.
But all is not lost, because this lift in rates has caused a wave of unhappy borrowers, who will now, be more likely to shop around. Here is where a professional mortgage broker comes is. If you or someone you know has an existing home loan, check your bank statement. For most people, it’s probably been a while.
So, do you just strap yourself in for the ride and accept the lender increases on your interest rate, or do you refinance, sending a message to your lender and enjoy the thousands of dollars of possible savings?
Might sound like a rhetorical question, but a good one to ponder, nonetheless.
Enquire via your local Loan Market Broker today to find out how much you could save or borrow for your next investment property.