INVESTMENT LOAN FUNDING
There are emerging changes that are affecting how Mortgages are being priced where the purpose is for investment funding.
It is always a reflecting moment when history repeats. When this author started in the finance industry 20 or so years ago interest rate pricing for investment purpose borrowing was at a premium to borrowing for domestic purposes. We are here again in 2015 with fears over the pace of investment lending.
We are also seeing reductions in loan to value ratios, meaning investors may require a greater deposit when purchasing investment property.
These changes are in response to the Australian Prudential Regulation Authority (“APRA”) demand that banks reduce the level of housing investor credit growth to below 10 per cent per annum.
So in 2015, and responding to pressure from regulators, banks are scaling down interest rates discounts offered for new property investors in comparison to owner occupied lending.
SUMMARY OF THE CH ...