In May I said that the screws were being turned to cool down lending on investor properties. You can read this by clicking here.
Now, the Australian Bureau of Statistics has reported that the number of home loan approvals fell by 6.1 per cent in May.
Financial regulators have expressed concern about an overheating (investor) property market and have set a benchmark for the banks to limit the increase in the amount they lend to investors by no more than 10 per cent.
All the banks have responded in various ways. But here are some examples on what they are doing:
- Westpac will only lend up to 80 per cent on investor properties (95 per cent for owner occupied)
- AMP now only treats 80 per cent of rental return as part income
- NAB no longer offers discounted rates on investor loans
But this does not mean that investors cannot get a loan. Good mortgage brokers know where a borrower is best-placed to get finance.
Elsewhere, Origin Finance CEO, Doug Daniell, has called on brokers to look at mortgage managers – who are not subject to the same regulatory pressures. The chances are that a good mortgage broker will know how to arrange an investor’s loan.