In a bid to hose down speculative property investment and help property price growth settle to more sustainable levels, the Australian Prudential Regulation Authority (APRA), has set new expectations in regards to investment lending.
Australian banks have begun to tighten their investment loan criteria following guidelines released by APRA, which oversees the activities of banks, credit unions and building societies.
These new guidelines include:
- A cap on investment lending growth
- Tighter approval criteria for investor loans
- Firmer controls over foreign investment loans
Lenders have responded in a variety of ways. Some have removed or reduced interest rate discounts for investors while others have lowered their loan to valuation ratios, meaning investors will need a bigger deposit.
With each lender responding differently, it's impossible to offer a one-size-fits-all statement about how investors will be impacted by APRA's guidelines. What I can say with certainty is that now is the time to seek expert advice.
Contact me fro a free home loan check if you want to look at how these changes will affect you.