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Mortgage featured stories

Lenders tighten investor lending policies

Home Finance, Mortgage Broking, News, Property
Share
Over the last couple of months we have seen an ever increasing level of lenders tightening credit policy around investment lending. In essence our banking regulator, APRA, has flexed its regulatory muscle to try and control the level of growth in investment lending. So why the increased regulation?
Well it appears the main drivers are: • The level of growth in Investment lending in a low interest rate environment is at a level that is considered too high for the comfort of the regulators; • The Sydney property market is experiencing potentially unsustainable levels of growth with two consecutive years of 15% price growth; • The number of commentators warning of a potential ‘property bubble’ are increasing. I am sure that many investors operating within property markets in capitals such as Canberra, Hobart and Adelaide are far from convinced that there should be concern with their local real estate markets, but the same regulatory approach has been taken nationwide.  ‘Propertyology’ provides an interesting commentary on this viewpoint in the attached link (http://www.propertyology.com.au/may-2015-marks-a-new-era-in-australian-real-estate/) But the reality is that many (some commentators would say ‘most’) lenders have tightened lending policy in areas such as: • Reducing Loan to Valuation Ratios (LVR’s) on investment lending – in some cases the maximum LVR now available to investors is 80%! • Increasing interest rates on Investment Loans – you can now expect to pay a higher interest rate on an investment loan versus what an owner occupier would pay. • Increasing serviceability assessments – effectively loan applicants borrowing power has now reduced with many lenders. • Removing the willingness to negotiate on interest rates for investment lending • Reducing the LVR on which Interest Only repayments are accepted. So what does this mean for borrowers? • If you are an investor looking to borrow again you will find that the borrowing landscape has changed significantly. A loan that would have been approved by many lenders some months ago may now be harder to obtain. I would suggest you discuss your requirements with a lending specialist such as your local Mortgage Broker. • If you are an owner occupier looking for finance, you will find that some servicing models have become a bit tighter. However there are positives as well! Lenders still have growth objectives and for strong applications borrowers now have significant negotiating power around interest rates. I would again suggest you consult with your local credit specialist to find the best deal for your circumstances. • If you are a First Home Buyer – well, entering the property market is still tough, but the regulators are trying to contain property price growth so that may slow property value increases while you are trying to save and locate a property. It is important to understand that there are finance options available for first home buyers that make obtaining finance achievable for many.  Clearly affordability remains easier in some property markets than others! Overall the clear message is that the lending environment has changed significantly over recent months. Your local Mortgage Broker or Credit Adviser can provide assistance in working through the options on offer and help you establish what will suit your personal circumstances.

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Is a tree or sea change on your horizon?

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Is a tree or sea change on your horizon? Fresh air, no bumper-to-bumper traffic and more affordable home prices. There’s plenty of appeal in regional living, including a chance to potentially reduce your home loan.

Is a tree or sea change on your horizon?

News
Is a tree or sea change on your horizon? Fresh air, no bumper-to-bumper traffic and more affordable home prices. There’s plenty of appeal in regional living, including a chance to potentially reduce your home loan.

Is a tree or sea change on your horizon?

News
Is a tree or sea change on your horizon? Fresh air, no bumper-to-bumper traffic and more affordable home prices. There’s plenty of appeal in regional living, including a chance to potentially reduce your home loan.

Why three-in-four Aussies turn to a broker for home loan help

News
Why three-in-four Aussies turn to a broker for home loan help You might have seen a headline or two about a particular big bank being at war with brokers. Nothing could be further from the truth. Our mission is – and always will be – putting you first. That’s why three in every four borrowers now come to us for help.

Why three-in-four Aussies turn to a broker for home loan help

News
Why three-in-four Aussies turn to a broker for home loan help You might have seen a headline or two about a particular big bank being at war with brokers. Nothing could be further from the truth. Our mission is – and always will be – putting you first. That’s why three in every four borrowers now come to us for help.

Why three-in-four Aussies turn to a broker for home loan help

News
Why three-in-four Aussies turn to a broker for home loan help You might have seen a headline or two about a particular big bank being at war with brokers. Nothing could be further from the truth. Our mission is – and always will be – putting you first. That’s why three in every four borrowers now come to us for help.

Mortgage featured stories

Lenders tighten investor lending policies

Home Finance, Mortgage Broking, News, Property
Share
Over the last couple of months we have seen an ever increasing level of lenders tightening credit policy around investment lending. In essence our banking regulator, APRA, has flexed its regulatory muscle to try and control the level of growth in investment lending. So why the increased regulation? Well it appears the main drivers are: • The level of growth in Investment lending in a low interest rate environment is at a level that is considered too high for the comfort of the regulators; • The Sydney property market is experiencing potentially unsustainable levels of growth with two consecutive years of 15% price growth; • The number of commentators warning of a potential ‘property bubble’ are increasing. I am sure that many investors operating within property markets in capitals such as Canberra, Hobart and Adelaide are far from convinced that there should be concern with their local real estate markets, but the same regulatory approach has been taken nationwide.  ‘Propertyology’ provides an interesting commentary on this viewpoint in the attached link (http://www.propertyology.com.au/may-2015-marks-a-new-era-in-australian-real-estate/) But the reality is that many (some commentators would say ‘most’) lenders have tightened lending policy in areas such as: • Reducing Loan to Valuation Ratios (LVR’s) on investment lending – in some cases the maximum LVR now available to investors is 80%! • Increasing interest rates on Investment Loans – you can now expect to pay a higher interest rate on an investment loan versus what an owner occupier would pay. • Increasing serviceability assessments – effectively loan applicants borrowing power has now reduced with many lenders. • Removing the willingness to negotiate on interest rates for investment lending • Reducing the LVR on which Interest Only repayments are accepted. So what does this mean for borrowers? • If you are an investor looking to borrow again you will find that the borrowing landscape has changed significantly. A loan that would have been approved by many lenders some months ago may now be harder to obtain. I would suggest you discuss your requirements with a lending specialist such as your local Mortgage Broker. • If you are an owner occupier looking for finance, you will find that some servicing models have become a bit tighter. However there are positives as well! Lenders still have growth objectives and for strong applications borrowers now have significant negotiating power around interest rates. I would again suggest you consult with your local credit specialist to find the best deal for your circumstances. • If you are a First Home Buyer – well, entering the property market is still tough, but the regulators are trying to contain property price growth so that may slow property value increases while you are trying to save and locate a property. It is important to understand that there are finance options available for first home buyers that make obtaining finance achievable for many.  Clearly affordability remains easier in some property markets than others! Overall the clear message is that the lending environment has changed significantly over recent months. Your local Mortgage Broker or Credit Adviser can provide assistance in working through the options on offer and help you establish what will suit your personal circumstances.

More Stories

Is a tree or sea change on your horizon?

News
Is a tree or sea change on your horizon? Fresh air, no bumper-to-bumper traffic and more affordable home prices. There’s plenty of appeal in regional living, including a chance to potentially reduce your home loan.

Is a tree or sea change on your horizon?

News
Is a tree or sea change on your horizon? Fresh air, no bumper-to-bumper traffic and more affordable home prices. There’s plenty of appeal in regional living, including a chance to potentially reduce your home loan.

Is a tree or sea change on your horizon?

News
Is a tree or sea change on your horizon? Fresh air, no bumper-to-bumper traffic and more affordable home prices. There’s plenty of appeal in regional living, including a chance to potentially reduce your home loan.

Why three-in-four Aussies turn to a broker for home loan help

News
Why three-in-four Aussies turn to a broker for home loan help You might have seen a headline or two about a particular big bank being at war with brokers. Nothing could be further from the truth. Our mission is – and always will be – putting you first. That’s why three in every four borrowers now come to us for help.

Why three-in-four Aussies turn to a broker for home loan help

News
Why three-in-four Aussies turn to a broker for home loan help You might have seen a headline or two about a particular big bank being at war with brokers. Nothing could be further from the truth. Our mission is – and always will be – putting you first. That’s why three in every four borrowers now come to us for help.

Why three-in-four Aussies turn to a broker for home loan help

News
Why three-in-four Aussies turn to a broker for home loan help You might have seen a headline or two about a particular big bank being at war with brokers. Nothing could be further from the truth. Our mission is – and always will be – putting you first. That’s why three in every four borrowers now come to us for help.

Mortgage featured stories

Lenders tighten investor lending policies

Home Finance, Mortgage Broking, News, Property
Share
Over the last couple of months we have seen an ever increasing level of lenders tightening credit policy around investment lending. In essence our banking regulator, APRA, has flexed its regulatory muscle to try and control the level of growth in investment lending. So why the increased regulation? Well it appears the main drivers are: • The level of growth in Investment lending in a low interest rate environment is at a level that is considered too high for the comfort of the regulators; • The Sydney property market is experiencing potentially unsustainable levels of growth with two consecutive years of 15% price growth; • The number of commentators warning of a potential ‘property bubble’ are increasing. I am sure that many investors operating within property markets in capitals such as Canberra, Hobart and Adelaide are far from convinced that there should be concern with their local real estate markets, but the same regulatory approach has been taken nationwide.  ‘Propertyology’ provides an interesting commentary on this viewpoint in the attached link (http://www.propertyology.com.au/may-2015-marks-a-new-era-in-australian-real-estate/) But the reality is that many (some commentators would say ‘most’) lenders have tightened lending policy in areas such as: • Reducing Loan to Valuation Ratios (LVR’s) on investment lending – in some cases the maximum LVR now available to investors is 80%! • Increasing interest rates on Investment Loans – you can now expect to pay a higher interest rate on an investment loan versus what an owner occupier would pay. • Increasing serviceability assessments – effectively loan applicants borrowing power has now reduced with many lenders. • Removing the willingness to negotiate on interest rates for investment lending • Reducing the LVR on which Interest Only repayments are accepted. So what does this mean for borrowers? • If you are an investor looking to borrow again you will find that the borrowing landscape has changed significantly. A loan that would have been approved by many lenders some months ago may now be harder to obtain. I would suggest you discuss your requirements with a lending specialist such as your local Mortgage Broker. • If you are an owner occupier looking for finance, you will find that some servicing models have become a bit tighter. However there are positives as well! Lenders still have growth objectives and for strong applications borrowers now have significant negotiating power around interest rates. I would again suggest you consult with your local credit specialist to find the best deal for your circumstances. • If you are a First Home Buyer – well, entering the property market is still tough, but the regulators are trying to contain property price growth so that may slow property value increases while you are trying to save and locate a property. It is important to understand that there are finance options available for first home buyers that make obtaining finance achievable for many.  Clearly affordability remains easier in some property markets than others! Overall the clear message is that the lending environment has changed significantly over recent months. Your local Mortgage Broker or Credit Adviser can provide assistance in working through the options on offer and help you establish what will suit your personal circumstances.

More Stories

Is a tree or sea change on your horizon?

News
Is a tree or sea change on your horizon? Fresh air, no bumper-to-bumper traffic and more affordable home prices. There’s plenty of appeal in regional living, including a chance to potentially reduce your home loan.

Is a tree or sea change on your horizon?

News
Is a tree or sea change on your horizon? Fresh air, no bumper-to-bumper traffic and more affordable home prices. There’s plenty of appeal in regional living, including a chance to potentially reduce your home loan.

Is a tree or sea change on your horizon?

News
Is a tree or sea change on your horizon? Fresh air, no bumper-to-bumper traffic and more affordable home prices. There’s plenty of appeal in regional living, including a chance to potentially reduce your home loan.

Why three-in-four Aussies turn to a broker for home loan help

News
Why three-in-four Aussies turn to a broker for home loan help You might have seen a headline or two about a particular big bank being at war with brokers. Nothing could be further from the truth. Our mission is – and always will be – putting you first. That’s why three in every four borrowers now come to us for help.

Why three-in-four Aussies turn to a broker for home loan help

News
Why three-in-four Aussies turn to a broker for home loan help You might have seen a headline or two about a particular big bank being at war with brokers. Nothing could be further from the truth. Our mission is – and always will be – putting you first. That’s why three in every four borrowers now come to us for help.

Why three-in-four Aussies turn to a broker for home loan help

News
Why three-in-four Aussies turn to a broker for home loan help You might have seen a headline or two about a particular big bank being at war with brokers. Nothing could be further from the truth. Our mission is – and always will be – putting you first. That’s why three in every four borrowers now come to us for help.

First home buyers turn to Bank of Nan and Pop

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First home buyers turn to Bank of Nan and Pop Nan and Pop have always been good for birthday money, but one-in-10 grandparents are taking their generosity to the next level: helping their grandkids buy a first home.

First home buyers turn to Bank of Nan and Pop

News
First home buyers turn to Bank of Nan and Pop Nan and Pop have always been good for birthday money, but one-in-10 grandparents are taking their generosity to the next level: helping their grandkids buy a first home.

First home buyers turn to Bank of Nan and Pop

News
First home buyers turn to Bank of Nan and Pop Nan and Pop have always been good for birthday money, but one-in-10 grandparents are taking their generosity to the next level: helping their grandkids buy a first home.

What you should know before buying ‘subject to finance’

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What you should know before buying ‘subject to finance’ Not sure if you’ll get the thumbs up for a home loan? But you really, really like that house that just popped up? Making an offer ‘subject to finance’ could be the right move. Here’s how it works.

What you should know before buying ‘subject to finance’

News
What you should know before buying ‘subject to finance’ Not sure if you’ll get the thumbs up for a home loan? But you really, really like that house that just popped up? Making an offer ‘subject to finance’ could be the right move. Here’s how it works.

What you should know before buying ‘subject to finance’

News
What you should know before buying ‘subject to finance’ Not sure if you’ll get the thumbs up for a home loan? But you really, really like that house that just popped up? Making an offer ‘subject to finance’ could be the right move. Here’s how it works.

Not feeling the budget love? 4 ways you could still get ahead

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Not feeling the budget love? 4 ways you could still get ahead If the latest federal government budget is leaving you hungry for perks and savings, you’re not alone. We’ve had a brainstorm and here are four ways you could start working towards your property goals now.

Not feeling the budget love? 4 ways you could still get ahead

News
Not feeling the budget love? 4 ways you could still get ahead If the latest federal government budget is leaving you hungry for perks and savings, you’re not alone. We’ve had a brainstorm and here are four ways you could start working towards your property goals now.

Not feeling the budget love? 4 ways you could still get ahead

News
Not feeling the budget love? 4 ways you could still get ahead If the latest federal government budget is leaving you hungry for perks and savings, you’re not alone. We’ve had a brainstorm and here are four ways you could start working towards your property goals now.

Low deposit scheme helps over 150,000 families buy sooner

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Low deposit scheme helps over 150,000 families buy sooner Whether you’re rat running your local streets, or have a knack for always picking the fast-moving supermarket queue – everyone loves a good time-saving hack. Well, today we’ll let you in on a scheme that could get you into your first home years – yep years – sooner!

Low deposit scheme helps over 150,000 families buy sooner

News
Low deposit scheme helps over 150,000 families buy sooner Whether you’re rat running your local streets, or have a knack for always picking the fast-moving supermarket queue – everyone loves a good time-saving hack. Well, today we’ll let you in on a scheme that could get you into your first home years – yep years – sooner!

Low deposit scheme helps over 150,000 families buy sooner

News
Low deposit scheme helps over 150,000 families buy sooner Whether you’re rat running your local streets, or have a knack for always picking the fast-moving supermarket queue – everyone loves a good time-saving hack. Well, today we’ll let you in on a scheme that could get you into your first home years – yep years – sooner!

Here’s why your borrowing power might soon get a lift

News
Here’s why your borrowing power might soon get a lift Who doesn’t love a tax cut? Most of us are now only weeks away from saving on our tax bills, with Stage 3 tax cuts to kick in from 1 July. But another key advantage is that the tax cuts could give your borrowing power a nice boost.

Here’s why your borrowing power might soon get a lift

News
Here’s why your borrowing power might soon get a lift Who doesn’t love a tax cut? Most of us are now only weeks away from saving on our tax bills, with Stage 3 tax cuts to kick in from 1 July. But another key advantage is that the tax cuts could give your borrowing power a nice boost.

Here’s why your borrowing power might soon get a lift

News
Here’s why your borrowing power might soon get a lift Who doesn’t love a tax cut? Most of us are now only weeks away from saving on our tax bills, with Stage 3 tax cuts to kick in from 1 July. But another key advantage is that the tax cuts could give your borrowing power a nice boost.

What you should know before buying ‘subject to finance’

News
What you should know before buying ‘subject to finance’ Not sure if you’ll get the thumbs up for a home loan? But you really, really like that house that just popped up? Making an offer ‘subject to finance’ could be the right move. Here’s how it works.

What you should know before buying ‘subject to finance’

News
What you should know before buying ‘subject to finance’ Not sure if you’ll get the thumbs up for a home loan? But you really, really like that house that just popped up? Making an offer ‘subject to finance’ could be the right move. Here’s how it works.

What you should know before buying ‘subject to finance’

News
What you should know before buying ‘subject to finance’ Not sure if you’ll get the thumbs up for a home loan? But you really, really like that house that just popped up? Making an offer ‘subject to finance’ could be the right move. Here’s how it works.

Not feeling the budget love? 4 ways you could still get ahead

News
Not feeling the budget love? 4 ways you could still get ahead If the latest federal government budget is leaving you hungry for perks and savings, you’re not alone. We’ve had a brainstorm and here are four ways you could start working towards your property goals now.

Not feeling the budget love? 4 ways you could still get ahead

News
Not feeling the budget love? 4 ways you could still get ahead If the latest federal government budget is leaving you hungry for perks and savings, you’re not alone. We’ve had a brainstorm and here are four ways you could start working towards your property goals now.

Not feeling the budget love? 4 ways you could still get ahead

News
Not feeling the budget love? 4 ways you could still get ahead If the latest federal government budget is leaving you hungry for perks and savings, you’re not alone. We’ve had a brainstorm and here are four ways you could start working towards your property goals now.

Low deposit scheme helps over 150,000 families buy sooner

News
Low deposit scheme helps over 150,000 families buy sooner Whether you’re rat running your local streets, or have a knack for always picking the fast-moving supermarket queue – everyone loves a good time-saving hack. Well, today we’ll let you in on a scheme that could get you into your first home years – yep years – sooner!

Low deposit scheme helps over 150,000 families buy sooner

News
Low deposit scheme helps over 150,000 families buy sooner Whether you’re rat running your local streets, or have a knack for always picking the fast-moving supermarket queue – everyone loves a good time-saving hack. Well, today we’ll let you in on a scheme that could get you into your first home years – yep years – sooner!

Low deposit scheme helps over 150,000 families buy sooner

News
Low deposit scheme helps over 150,000 families buy sooner Whether you’re rat running your local streets, or have a knack for always picking the fast-moving supermarket queue – everyone loves a good time-saving hack. Well, today we’ll let you in on a scheme that could get you into your first home years – yep years – sooner!

Here’s why your borrowing power might soon get a lift

News
Here’s why your borrowing power might soon get a lift Who doesn’t love a tax cut? Most of us are now only weeks away from saving on our tax bills, with Stage 3 tax cuts to kick in from 1 July. But another key advantage is that the tax cuts could give your borrowing power a nice boost.

Here’s why your borrowing power might soon get a lift

News
Here’s why your borrowing power might soon get a lift Who doesn’t love a tax cut? Most of us are now only weeks away from saving on our tax bills, with Stage 3 tax cuts to kick in from 1 July. But another key advantage is that the tax cuts could give your borrowing power a nice boost.

Here’s why your borrowing power might soon get a lift

News
Here’s why your borrowing power might soon get a lift Who doesn’t love a tax cut? Most of us are now only weeks away from saving on our tax bills, with Stage 3 tax cuts to kick in from 1 July. But another key advantage is that the tax cuts could give your borrowing power a nice boost.

How to know if you’re paying a fair price

News
How to know if you’re paying a fair price We all love the idea of nabbing a bargain property, but for most home buyers the real issue is whether they’re overvaluing a place – and paying too much in the process.

How to know if you’re paying a fair price

News
How to know if you’re paying a fair price We all love the idea of nabbing a bargain property, but for most home buyers the real issue is whether they’re overvaluing a place – and paying too much in the process.

How to know if you’re paying a fair price

News
How to know if you’re paying a fair price We all love the idea of nabbing a bargain property, but for most home buyers the real issue is whether they’re overvaluing a place – and paying too much in the process.

Can you remember your home loan interest rate?

News
Can you remember your home loan interest rate? Where you put your car keys, who won the footy premiership three years back, the new prime minister of New Zealand’s name – all very much socially acceptable things to forget. Your home loan rate shouldn’t be on that list.

Can you remember your home loan interest rate?

News
Can you remember your home loan interest rate? Where you put your car keys, who won the footy premiership three years back, the new prime minister of New Zealand’s name – all very much socially acceptable things to forget. Your home loan rate shouldn’t be on that list.

Can you remember your home loan interest rate?

News
Can you remember your home loan interest rate? Where you put your car keys, who won the footy premiership three years back, the new prime minister of New Zealand’s name – all very much socially acceptable things to forget. Your home loan rate shouldn’t be on that list.