Which lenders are tightening restrictions for investors?

Which lenders are tightening restrictions for investors?

If you’re a property investor in Australia you’ve probably heard there has been a sweep of changes to investment loans, as the Australian Prudential Regulation Authority urges providers to slow their investor books to under a 10% annual growth.

APRA’s pressure on lenders seems to be working with new lending to property investors falling by 0.7% over June, according to the latest Australian Bureau of Statistics housing finance stats.

Here at Mozo, we’ve been closely monitoring the home loan market and have noticed lenders using two main tactics to bring down their investment loan growth; increasing rates for investors and/or reducing their maximum LVR requirements.

Read on as we reveal the biggest investment loan changes in the market:

Big four banks

  • Commonwealth Bank:

Australia’s most profitable bank, CommBank has increased its standard variable rate by 0.27% to 5.72% for new and existing investor loan customers. 1-5 year fixed rate loans for investors have also been lifted by between 0.10% to 0.40%.

  • Westpac:

Big four bank Westpac has lifted its investor loan rates by 0.27%, bringing its standard variable rate to 5.75%. Existing investor customers will also be hit by the rate rise from 25 September. Fixed rate investor loans have increased by up to 0.30%.

Westpac has also reduced its maximum loan to value requirements to 80%, meaning investors now need a deposit of at least 20%.

  • ANZ:

The majors have stayed consistent with their rate hike choices, as ANZ has also lifted its variable rates for investors by 0.27% to 5.65% and its fixed investor rates by up to 0.30%. Investors must now have a deposit of at least 10%.

  • NAB:

The National Australia Bank has taken a slightly different tactic to its major competitors, instead increasing rates on its interest only home loans and line of credit facilities, by up to 0.29%. NAB also now requires investors to have a deposit of 10% or more.

Other lenders  

  • AMP Bank:

Smaller provider AMP Bank has completely ruled out any more lending to investors for the foreseeable future. It has also increased its variable rates for existing investor property loans by 0.47%.

  • UBank:

UBank, which falls under the umbrella of NAB has lifted its rates for investors by 0.29%, bringing its standard variable rate to 4.71%. Existing customers will receive the rate increase from 10 September.

  • Bankwest:

On its Super Start Home Loan, Bankwest has increased the intro rate by 45 basis points from 4.09% to 4.54% for 36 months (revert rate remains 5.35%). Bankwest’s 2 year fixed rate has also jumped up for investors by 0.35% and 0.20% for 3 years. Investors will also need a deposit of at least 20%.

  • ING DIRECT:

While ING DIRECT has made no changes to its variable rates for investors, it has lifted rates across its 1-5 fixed year investment loans by 20 basis points. ING DIRECT has also capped investor LVRs at 80%.

  • St. George

Investors now face a 0.34% higher rate with the St.George Basic Home Loan and 1-5 year fixed rates will lift by up to 0.50%.

More providers that have increased their standard variable rates for investors include:

loans.com.au: up 0.25%

BoQ: up 0.29%

eMoney: up 0.15%

firstmac: up 0.15%

iMortgage: up 0.15%

Heritage Bank: up 0.30%

Macquarie: up 0.27%

Homestar: up 0.10% (LVR up to 85%)

Freedomlend: up 0.10%

Yellow Brick Road: up 0.10%

Finding an investment home loan

While there has been a significant amount of movement by lenders in hiking up rates and lowering maximum LVR requirements, our database shows that only 26 out of 85 home loan providers have made changes for investor loans.

So if you’re an investor after a home loan deal, visit our investment loan hub or if you want to have a chat with a property expert, give our home loan negotiators a buzz on 13 6696 (MOZO).

Please note, any rates or features mentioned in this blog were available at the time of writing and may have changed.

Which lenders are tightening restrictions for investors? was last modified: August 11, 2015 by Rebeccah Elley

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