APRA imposing controls on "investors only"

There are other ways that it could be dealt with eg making banks change their risk ratings on investment loans. The problem with these other methods is that you can have a credit squeeze which will affect sound operators too.

Back in the 80s and early 90s the banks did charge a higher rate on investment loans than on owner occupied housing.

APRA has been applying a lot of pressure to a number of banks over the last few weeks which have indeed meant that the serviceability models have been tightened. A key example of this is with AMP – whose niche policy set have been wiped out over night. It appears this will be following through with quite a few other lenders, as APRA attempts to cool down the growth of investment debt.

As always, evolve with the new challenges we face!

Yes, ANZ, Westpac and Commonwealth Bank have made the changes to their loan criteria.

ANZ has confirmed it will no longer offer discretionary pricing to investor only loans or offer a switching discretion to investors.
Westpac has removed its negative gearing benefit.
CBA has put a halt to “pricing discounts for investment home loans.

Interesting. ANZ and NAB have said that they are no longer offering discretionary pricing, but CBA and Westpac have “reduced” their investor discounts which seems to suggest they are still offering them in some format.

I just had extra discount approved for a Westpac investor deal, albeit being to renew a pricing discretion that had expired a month back.

I wonder if other brokers have tried with Westpac and/or CBA and had luck?

Cheers

Tom

To all of our mortgage brokers in the forum, thanks for your first-hand updates. It’s very helpful for the broader PI.com community.

Some very large fundamental shifts in the policies of the lenders at this time – spending a lot of time with clients at the moment reviewing their situations so we can ensure we will meet their goals moving forward. Pre-approvals with a number of lenders aren’t being honoured with their new policies in place, which will make for awkward times for some investors.

I’d stress the importance to anyone here to show some prudent planning with their financial strategies at this time, otherwise some very simple costly mistakes will slow you down on your property journeys!

Nab and Advantedge have announced their changes today.

On the surface – they don’t seem as drastic as changes implemented by other banks such as AMP and Macquarie.

They’re applying a “loading” to debt held with other lenders rather than assigning an assessment rate of 7% + on P&I terms.

Cheers

Jamie

DeanCollins wrote:

Richard Taylor wrote:

Corey is correct about pre-approvals.

I had 2 forum clients ring me on Friday to ask me how they would go with their OTP purchases which were supposed to be complete by the end of this year. Regretfully had to tell them as it stood they would not qualify.

I am sure there will be many more clients in the same boat.

So is this going to be enough to take the steam out of the Sydney market?

Based on this weekends auctions I’d say not but as I’m just about to buy next IP …would prefer not to be buying he month before everyone decides yeh we are over paying….

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I’ve been of the mind that Sydney has already hit it’s effective peak – considering we’re hitting equilibrium in the ‘further boom’ vs ‘property bubble’ talk in the media, industry related commentary etc. We may see a further spike in the meantime, but it wouldn’t be surprising to see a minor correction over the forward period.

APRA’s fiddling will only play further into this – if the data shows a slow down in lending growth we may be saved from further intervention.

Meanwhile other healthy markets are getting hit from the excesses of NSW – we may see further localised policy such as ING’s just released (max 80% LVR for NSW properties).