September 22, 2015
What's happening? Changes to investment lending & Interest Only loans
You may or may not be aware that there have been recent changes implemented by the mortgage lending industry specifically in regard to investment lending & generally in regard to Interest Only loans. The Australian Prudential Regulation Authority (APRA) have issued guidelines that have resulted in these changes.
There are economic reasons for these changes including but not limited to slowing the Sydney & Melbourne property which the Federal Govt & the RBA have concerns is overheated, to sustain a safe banking system in Australia & to make sure customers can afford to pay their home loans in the long term.
How will it effect you? With increases in interest rates & stricter lending criteria
If your current owner occupied loan has Principal & Interest repayments then it is unlikely to effect you - some lenders have decreased their rates on new loans to ensure they attract this type of lending.
If you have a variable rate investment loan, or an Interest Only variable rate owner occupied or investment loan it is most likley that your lender is going to increase your interest rate.
If you are considering purchasing an investment property you will find the lending market is more restricted than in the past.
All of this doesn't mean you won't be able to have a loan approved for investment - it does mean that you are going to need more assitance to ensure you have the best loan & lender for you.
Everyone's situation is of course different so please contact me via email or give me a call to discuss your situation either to review what you currently have or to discuss your purchasing options.