Investment Lending Update Broome

Investment Lending Update Broome

Investment Lending Update Broome

The old saying of nothing stays the same forever can certainly be applied to Home Loan lending and specifically Investment lending by the Banks in 2017.
 
Early in the year the Australian Prudential Regulation Authority (APRA) announced new measures around residential mortgage lending in order to curb investor borrowing.  These industry-wide regulatory changes apply to all lenders in the industry and potentially all property investment loans.
 
The ramifications of these measures have seen numerous changes to the Home Loan market initially in the investor sector but now spreading to the owner occupied sector as APRA drives changes to how the Bank’s lend to different market sectors.
 
In terms of Investment Home Loans, changes made by the Banks include:
  • Restricting to investment lending to a maximum 90% of loan-to-value ratios (LVRs)
  • Restricting interest only levels and terms of interest only (eg maximum interest only term of 10 years)
  • More stringent servicing levels reducing affordability across the board by applying higher buffers to existing loans
  • Greater level of postcode restrictions reducing LVR levels in those areas as well as in some cases Bank’s not allocating rental income or reducing income levels for those areas.
 
If you are an existing investor you would have no doubt seen an increase in your Home Loans rates.  This increase is somewhere between 0.25% - 0.50% and possibly even greater if your loan/s is currently interest only.
 
We now see in the majority of Bank’s a distinct divide between owner occupied home loans, and investment home loans and a further divide between principal & interest rates and interest only rates.  Something of a challenge when trying to sort through current portfolios and future borrowings and who in deed is offering the best rate options.
 
However one thing is certain, the Banks are still very much open for business and normal competitive conditions still remain.  Yes the Banks are employing greater policy requirements to their lending but they remain very keen to secure new business that falls within their parameters.
 
Changes have been difficult to keep pace with as each Bank’s policy/s, rates and appetite for lending varies significantly.  This being the case it is vital that you have an advisor, Mortgage Broker or the like who is across the broad spectrum of requirements at each Bank. 
 
Having an experienced ally who can guide you through has never been more important than now. If you’d like more information please contact Ian Poulter from North West Finance on (08) 91935555 or email [email protected] Australian Credit Licence No. 370698 www.nwfinance.com.au 
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