Banks act on investor home loan growth

Finance Financial Business Economy Exchange Accounting Banking Concept

(Australian Associated Press)

WHAT THE BANKS HAVE DONE TO SLOW INVESTOR HOUSING LENDING

AMP

* No new investor property loans until later in 2015

* 47 basis point lift in variable rate on existing investor property loans

* Also applies to already-approved applications

* Cut variable rate for new owner occupied loans on AMP Bank Professional Package to as low as 4.12 pct (from 4.35 pct)

* Its mortgage book comprises less than 1 pct of Australia’s overall mortgage market

* APRA figures show AMP Bank’s housing investment loan book worth $2.92 billion

ANZ

* 27 bps rise in variable residential investment property rate (to 5.65 pct)

* Up to 40 bps cut in fixed rates for new owner-occupied home lending

* Other measures for residential investors:

– Reduced rate discounts

– Deposit required increased to at least 10 pct

– Increased interest rate sensitivity buffers

COMMONWEALTH BANK

* 27 bps lift in standard variable rate on investor home loan (to 5.72 pct)

* Fixed investor home loan rates up 10-40 bps

* Up to 30 bps cut in fixed rate owner occupied loans

MACQUARIE

* Increased rates for investment home loans by 27 bps

NAB

* 29 bps lift in variable rates on interest-only home loans, line of credit facilities

WESTPAC

* Rates remain under review

* Currently doesn’t charge different rates for investors and owner-occupiers

* Largest lender to landlords

* APRA figures show Westpac’s investor home loan portfolio worth $150.87 billion

SOME OF THE BANKS’ OTHER RECENT INVESTOR LOAN CHANGES:

* Reducing/removing rate discount for new investors

* Tougher loan-to-valuation ratios for investor loans

– 80 pct LVR cap by some lenders

– Means new property investors need at least 20 pct deposit

* Increased floor rates

– Is rate against which borrowers have to prove can still make repayments

– Most lenders have floor rate 7 pct or above

* Changes to servicing calculations

– Some restricted which income is assessed in affordability calculations

– Some increased living expenses part of serviceability calculations.

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