If you’re a property investor or planning to invest soon, there are some major changes to lending that you need to know about. These changes affect investment loans for new and existing clients.
As reported in the media lately, Australian Prudential Regulation Authority (APRA), the federal regulator, is implementing some major and unprecedented changes to the Australian mortgage industry.
These changes have come about due to concern at the current level of property investment and the fear of “over-lending”. Property price growth, particularly in Sydney and Melbourne, and low interest rates have fuelled most of the unprecedented growth in investment.
APRA want to slow this down. They have mandated that financial institutions must not grow their Investment Loan portfolio by more than 10% this year. This change seems harmless but current demand is running much higher than 10% and many financial institutions are already close to or over this 10% growth limit.
Some of the changes lenders have made include:
- increased fixed and variable interest rates for existing and new loans
- reduction of discounts for investors
- reduced loan to value ratio for new interest only owner occupier loans and investment loans
- some lenders have ceased lending to investors altogether, including Self Managed Super Funds.
It’s not all doom and gloom though! We just need to find a way through the obstacles to find a solution for you.
For more information no these changes, follow this link or email me.
Banks are still competitive for other loans though, so if you’re a first time buyer or looking to upgrade, there’s some great deals available.
Anything I can do to help, I’m just a phone call away!
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Regards
Michael
0405 113 543
