The fallout from APRA’s new lending requirements continues…
We recently wrote about the effects on lending due to APRA’s tough stance on high LVR loans, extensive investor lending and lenient loan servicing.
As you’ve no doubt read, heard or personally experienced lending has changed…
In recent months the banks have introduced new stricter lending guidelines, reduced LVRs for investors and hiked rates by as much as .29% on not just new, but also existing investor and owner-occupier loans.
Unfortunately, it’s not about to get better…
Just yesterday Westpac announced it was increasing the variable interest rates on residential owner-occupied and investment loans by .20%, in response to the additional capital raising requirements set by APRA.
Westpac is the first major to raise rates out of cycle you can bet the other lenders will follow suit.
So while the RBA’s cash rate has stayed at a record-low of 2.00% since May and there are expectations of further interest rate relief before the end of the year, any cuts are now likely to be negated by the actions of the major banks.
In addition, future rate relief from the RBA might not be passed on in full by lenders, and rates could further increase across the board due to the pressure to meet APRA’s capital requirements by mid-2016.
All in all you’re likely to see increases of up to .50% [for owner-occupiers & Investors] in ‘out of cycle’ movements by most banks over the next 6-9 months as they adjust their pricing to accommodate the rise in the cost of funding.
These are certainly confusing times for borrowers!
What to do…
If you’re thinking of buying or refinancing existing loans we can help you negotiate the best possible deal for your situation from our extensive panel – including non-bank lenders not impacted by APRA’s lending requirements. Here’s a look at some of the best rates.
- Book a free finance & wealth evaluation – click here and we’ll find you the best possible loan
If you’ve got existing home and investment loans and you’ve been with your lender for a few years, chances are you’re paying too much. Rather than look after their existing clients most banks offer new clients better rates and/or incentives – it’s another reason why you should always re-assess your loans every few years. Here’s what to do;
- Check your current rates – review all of your current loans to determine the interest rate you’re currently being charged.
- Contact us for help – call or email us because in many cases we can negotiate a better interest rate with your existing lender!
We encourage you to contact us 08 8451 1500 to see how we can help you get a better deal!
Sam & Matt
Adelaide Mortgage Broker +plus more…