All Topics / Help Needed! / New lending rule – calculating repayment on existing loans

Viewing 4 posts - 1 through 4 (of 4 total)
  • Profile photo of rockneyrockney
    Participant
    @rockney
    Join Date: 2010
    Post Count: 4
    June 19, 2015 - 9:09 am

    Hi all,
    I recently have an investment loan application rejected by one of the big 4 bank, due to fail in servicing. The application was submitted via my broker and she later told me that the lenders currently have very strict lending rule due to government’s new legislation, that they are unable to accept actual repayment on the existing loans to new lending calculation.

    She stated for all existing loans the repayment were calculated base on P&I @ 7.34% pa. As I already have a number of investment loans at various banks (some are interest only @ interest rate of ~4.5%).

    I just want to see if other investor has run into the same issue.

    Thanks all.
    Rockney

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213
    June 19, 2015 - 2:16 pm

    No new legislation just comments from APRA to the banks that they are too easy. Things will get tighter. it is effecting many investors.

    However there may still be lenders out there that you can service with.

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

    Profile photo of Jamie MooreJamie Moore
    Participant
    @jamie-m
    Join Date: 2010
    Post Count: 5,069
    June 19, 2015 - 2:31 pm

    There’s still options!

    Different banks have different methods of calculating borrowing capacity.

    Some would still calculate your interest only debt of 4.5% at that (ie. they don’t inflate it)

    Cheers

    Jamie

    Jamie Moore | Pass Go Home Loans Pty Ltd
    http://www.passgo.com.au
    Email Me | Phone Me

    Mortgage Broker assisting clients Australia wide Email: [email protected]

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024
    June 20, 2015 - 9:35 pm

    Hi Rockney

    Yes structuring an investment portfolio to allow you to move forward with your property acquisitions is becoming more of an art form as more and more lenders increase their servicing hurdles.

    Be amazed at the difference in how much you can now borrow between lenders these days.

    Cheers

    Yours in Finance

    Richard Taylor | Australia's leading private lender

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