The regulator’s drive to calm down the (investor) property market may be having a negative impact on home owners. Who, through no fault of their own, are seeing interest rates rise.
Ironically this is happening at a time when other home owners are enjoying ultra-low interest rates.
The government regulator, the Australian Prudential Regulatory Authority (APRA), has told the banks to limit their growth in investment loans to 10 per cent. As result the banks are making it harder for property investors to get finance; the main way that they are doing this is by increasing interest rates for investors.
However, sometimes owner-occupiers are being caught in this rate hike through no fault of their own because of the banks’ IT systems. For example, NAB’s system does not permit the bank to raise interest rates just for investment loans. As a result NAB has raised interest rates for interest-only loans by 0.27 per cent as most investors borrow interest-only.
But some home-owners are collateral damage. If you are a NAB customer with an interest-only loan on your own home, your interest rates will be going up.
Such changes are not just confined to NAB. For example, the Origin office recently received a phone call from a client who had been told by another bank that his own home interest rate was going up.
Ironically, interest rates have never been lower for some time. A couple of lenders recently announced home loans at a record-breaking 3.99 per cent.
If you are concerned that your rates could go up, or if you just want to see if you could get a cheaper loan. Please contact me for a no-obligations review of your situation.