Mozo forecast non-bank lenders to reap shocked off the plan borrowers in APRA crackdown
Non-bank lenders are set to be flooded with interest from investor borrowers as loans from the Big 4 dry up in response to pressure from APRA, the loan comparison website, Mozo forecast.
“Non-bank lenders are likely to reap the rewards of investors being turned away by the big banks,” said Mozo home loan expert, Steve Jovcevski.
“Some investors are having applications rejected, resulting in a flurry of panicked refinancers flooding the market, especially those settling on properties as early as this week.”
“In particular, those who have bought properties off the plan will get a rude shock when it comes to financing their purchases,” he said.
"Mozo’s advice for investors is to look beyond the big four to non-bank lenders to secure an investor loan.
"Out of 83 lenders on Mozo, 48 are non-bank lenders and not strictly under regulation by APRA," he said.
The average Big 4 variable rate is 4.69% while the top rate from a non-bank lender is a low 3.98%.
Top 5 non-bank loan rates:
Lender | Rate | Comparison rate | Max LVR |
Homestar | 3.98% | 4.01% | 95% |
Loans.com.au | 3.98% | 4.00% | 90% |
iMortgage | 4.04% | 4.08% | 90% |
Newcastle Permanent | 4.09% | 4.45% | 80% |
State Custodians | 4.09% | 4.42% | 80% |
Based on a $300k loan amount. Loans available to investors and owner occupiers. Source: Mozo.com.au as at 22/5/15 | |||
“Not being strictly regulated by APRA doesn’t mean it will be a walk in the park, these lenders will still be cautious as a result of the actions of the majors,” said Jovcevski.
“If you were looking to buy as an investment, it might mean a trip back to the drawing board to save more.”
“Across the board, serviceability measures will be more stringent so it’s even more important to have a solid savings history and a good payment record. Worst case scenario you may need to lower your purchase budget in order to borrow with an 80% LVR,” said Jovcevski.
For information on property loans, rates and more, visit Mozo.com.au or click here for the free Property Observer eBook, Get loan-savvy – tips for a first time, investment or refinancing loan, which helps you decide on a home loan that meets your requirements.