Good news for investors as lenders reduce interest rates

In a trend that has emerged since the end of last year, January 2016 saw Australian home loan lenders continue to reduce the rate of investor premiums.

In 2015 APRA announced new restrictions that meant lenders were required to meet a maximum of 10% portfolio growth per annum for investors. This led to some of the big banks, including the major four of CommBank, Westpac, ANZ and NAB, increasing rates.

Other lenders, however, which have remained well within the 10% limit, have responded by cutting rates for investors throughout January. Mozo’s data showed six lenders reduced the premium payable by investors, while one removed the fixed rate premium entirely.

The latter Newcastle Permanent, lowered its fixed rates for investors to 3.79% for 1 year, 3.89% for 2 years, 3.99% for 3 years, and 4.29% for 5 years, while increasing rates for owner-occupier loans. The result was that investor and owner-occupier loans are now charged at the same rate.

RELATED: Newcastle Permanent reduces its investor fixed interest rates

Other changes included a 30bp reduction for 1, 3, 4 and 5 year loans from ME, as well as a reduction of 40bp on 2 year loan terms.

Suncorp cut its Home Package Plus 3 year fixed rate loans by 20bp, to a rate of 4.34% for investors (4.09% for owner-occupiers) and also introduced a special 4.42% variable rate for investors, (previously, the best investor package rate was 4.82%).

AMP Bank who cut investor lending completely for a period last year, is now not only lending to investors once again but has also cut both variable and fixed rates for investors, dropping its Basic Package variable rate by 40bp and fixed package rates by up to 58bp.

IMB Bank made smaller cuts, reducing the Essentials Home Loan variable rate by 5bps to 4.56% and the fixed rate platinum package for investors by 10bp for 1 year and by 20bp for 3 and 5 years.

Want to see what other great rate home loan packages are out there for investors? Check out our investment loan comparison table to compare deals today.

Home loan comparisons on Mozo - last updated 4 March 2024

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* WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. The comparison rate displayed is for a secured loan with monthly principal and interest repayments for $150,000 over 25 years.

** Initial monthly repayment figures are estimates only, based on the advertised rate. You can change the loan amount and term in the input boxes at the top of this table. Rates, fees and charges and therefore the total cost of the loan may vary depending on your loan amount, loan term, and credit history. Actual repayments will depend on your individual circumstances and interest rate changes.

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