The Australian Federal Government has enforced lenders to immediately reduce investment lending practices. Achieve Finance / LJ Hooker Home Loans Northern Beaches can advise you of the implications of such changes. 

The Australian Federal Government has enforced lenders to immediately reduce investment lending practices. Achieve Finance / LJ Hooker Home Loans Northern Beaches can advise you of the implications of such changes. 

Loans for investment lending are changing, below we have outlined what it means to you and what you should do.

We all know that the property market, especially in Sydney has been heated for some time and entry to the market for younger generations is a challenge.

What you may not be aware of is that the government has recently enforced some conditions on lenders to immediately reduce their investment lending practices, meaning it is now harder and more expensive to borrow for investment purposes.

The changes vary lender to lender with many existing owner occupier and investment loans being affected. Some changes for major banks are listed below:

  • CBA – an increase to the variable rate on any investment loan by 0.27% 
  • ANZ - an increase to the variable rate on any investment loan by 0.27% 
  • NAB - an increase to the variable rate on any Interest only loan by 0.29% 
  • Westpac - an increase to the variable rate on any investment loan by 0.27%
  • Other lenders – contact us for more information

What this means for you

Generally this will increase the cost of most investment mortgages and make property investment less desirable (which is the overriding goal of the government action), while at the same time, it will help the banks earn greater profits.

You’re circumstance may be that you have moved into your investment property since taking a loan and not updated the product, or you may be paying the loan down but are still in an interest only period. If this is the case, then we can look to vary the account with the lender to ensure you receive the best possible pricing on your mortgages.
 

What you can do

Right now, we suggest to sit tight. Let’s wait and see how this all pans out over the coming weeks before making any long term decisions. Once we see what the new landscape will look like across the market, then we can identify opportunities where benefits lie and savings are available.
 

What you shouldn’t do

Is jump to a new lender who looks good now and then be caught out as they change their products in the short term.

If you have any further questions, be sure to contact us.


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