Rate increase for investment loans - APRA

Posted Monday, 27 July 2015 at 19:09 by Shape Home Loans
Tagged: Investors | interest rates | news | APRA lending laws
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Rate set to increae for investors loan

What is the new APRA changes all about?

In summary the APRA ( Australian Prudential Regulation Authority) wants to slow down the property "bubble" and the amount of "investors" buying.

APRA has set a target of max 10% growth on the banks investment books.,

The Big 4 banks has a 30th July 2015 Deadline.

The Tier 2 banks has a 31st Dec 2015 Deadline.

http://www.abc.net.au/news/2015-05-18/investor-home-loans-tighten-as-regulator-clamps-down/6477134

Rate are going for up investors, especially loans on Interest only

ANZ  + 0.27% rate increase for all existing and new investors loan.as of 10/8/2015

CBA  + 0.27% rate increase for all existing and new investors loan as of 10/8/2015

NAB  + 0.29% rate increase  for all existing and new interest only loans ( investors and principle place of resident), this applies to investors loan on Principle and interest repayments as well, as of 10/8/2015

Macqauire Bank  + 0.27% rate increase for all existing and new investors loan as of 31/7/2015

Bankwest - New 3 years rate special home loan for investor will be going up by 0.22% as of 25/7/2015 ( Going down for owners occupier loans)

AMP ( NOT YET CONFIRMED) - 1% rate increase for new investment loans and existing 

List as of 27/7/2015

Solutions to the new lending rules

1. Consider smaller banks and credit unions, as most are NOT effected ( There are over 60+ banks/credit unions in Australia) 

2. Lock in your interest only loans now...as interest only may not be avaliable moving forward ( Especially after Octomber 2015 when the next round of rules is set to come out)

3. Take out any equity you have now, as it will be hardier to take out equity later on

4. Plan ahead, and dont just go for rate ( this sounds counter productive) but the lenders policy is probably more important than rate as the rate can change and does change.

Lenders policy

- Equity release/ cash out

- LVR

- Secuirty they accept

- Servicing/ how much they lend you

- LMI cost

- Set up cost