AMP Bank says no more investor home loan lending
Over the past week, we’ve seen Australian banks increase their interest rates and LVR requirements for investor home loan applications, in an attempt to reduce their investment home loan portfolio growth.
Smaller mortgage provider, AMP Bank has taken things a step further by announcing today that they will no longer “be accepting new or assessing existing investor property lending applications.”
The news comes as both ANZ and the Commonwealth Bank recently increased their variable and fixed rates on residential investment property loans.
The reason behind this shift away from investor home loans is due to the Australian Prudential Regulation Authority requiring mortgage lenders in Australia to reduce their investor mortgage growth by under 10% per annum.
Michael Lawrence, Managing Director at AMP Bank explained, "Australia's property market is experiencing high levels of investor property lending growth and we are supportive of the regulator's intention to slow this growth to appropriate levels."
From 7 September 2015, AMP Bank will also hike up its variable rates for existing investor property loans by 0.47%, which also applies to any investor loan applications that have been recently approved.
AMP Bank says that the decision to only accept owner occupier loan applications is expected to last until later in 2015 and will be revised depending on market conditions.
"We appreciate the position this puts our customers in and will be working with our distribution network to actively communicate with them."
As an incentive to increase its owner occupier portfolio, AMP Bank will reduce interest rates, as of 27 July for new owner occupied variable loan rates on the AMP Bank Professional Package to as low as 4.12%.
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