Concerned over getting an investment property loan?: iChoice's Jason Khoury

 

So what's going on with APRA currently?

 

Firstly, the changes are not targetted at homeloans taken to purchase your homes. Rather, there is pressure on the lenders to tighten their policies for lending against, and to buy, investment properties.

 

Lending to property investors is way past the speed limit, particularly in Sydney & Melbourne. APRA have made it clear that the banks need to be more careful.

The capital aqequacy ratio's for the banks will also increase. What this effectively does it make it more expensive for banks to lend to investors.

 

NAB, CBA & Westpac have already announced to us that investors will not be offered discounts better that is what is published. As you know, us brokers often get discounts 30 or 40 points better than what the banks advertise. Thankfully, we expect our capacity to get much better-than-published rates will still apply to home loans for places you will live in.

 

St George is one of my favorite banks, in large part due to their flexibility for investors. They have pre-warned iChoice of forthcoming changes too. For those of you wanting to land a better rate on your investment loan, or perhaps to unlock some equity, these are probably things you should be considering to do immediately, like right now. And the $1,250 Refinance Rebate is still alive. The mortgage industry is ready for a few busy weeks ahead.

 

Once all the changes have been implemented, we will see stricter servicing calculations and pressure to reduce interest-only loans and 'cash-out' (equity unlocking). Also, several lenders have already ceased exceeding 80% LVR for investment property loans. On that note, it is important for anyone you know that may have a pre-approval in place for an investment property. Pre-approvals arent always what they seem to be.

 

It's being branded a 'mini-GFC' but at the end of the day, it seems like we are simply going back to the old days, where speculative investment loans are harder to get and are not priced the same as your owner-occupied home loan.

 

At the end of the day, the concerns held by APRA are to protect our system should we in fact be at 12 o'clock on the property cycle. You can be assured that we at iChoice are on our front foot with all changes and will kep you posted, and are more than happy to advise based on your individual goals and circumstances.