In light of APRA’s (Australian Prudential Regulation Authority) reigning in of investment lending policies, it’s becoming increasingly clearer that quality advice is paramount in the effort to stay ahead of the game when it comes to financing your next investment.
Many of Australia’s banks are making significant changes to their investment lending policy and pricing. The majority have increased interest rates for investment loans by between 27 and 29 basis points with one in particular increasing by as much as 47 basis points. This, coupled with policy changes including restrictions on maximum loan-to-value ratios and increased floor rates for loan servicing has the potential to ‘spook’ those looking to purchase an investment property, but it doesn’t have to be that way.
Comparatively, standard variable rates are still extremely low when you take into consideration they were around 7.8% p.a. for most of 2011 and 9.45% p.a. in parts of 2008. If Investors now find themselves short of cash to complete the purchase, they still have the ability to use the equity they have created in their own home to assist.
A rental property is traditionally the go-to strategy for Australia’s Mum and Dad investors and while it appears our governing bodies are trying to keep a lid on the growth in this market, it’s not all doom and gloom. The basic principles still apply when making a judgement call on where to invest your money, ‘do the risks associated outweigh the potential gains to be made?’
If you would like to learn more about your finance options, call Dane on 0438 626 885 or visit www.mortgagechoice.com.au/dane.heinrich
Dane Heinrich, Franchise Owner – Mortgage Broker of Mortgage Choice Sale.