If you are thinking about trying to obtain an investment home loan for an investment property at Smartline Rockingham, you need to call us ASAP. Recently, the Australian Prudential Regulation Authority (APRA) decided to implement major changes for investor loans on an unprecedented scale. This is already having a huge effect on property investors.
What APRA is Doing
The APRA has mandated that no financial institutions will be allowed to grow their investment loan portfolio by more than 10% for this year. Normally, this would not be a problem. However, the rise of the small investor has been a large part of our recovery. This has created a demand for investment loans that would represent a growth of much more than 10%.
The result is that some major lenders have already reached the 10% threshold and one major lender has announced that they will not be providing investment loans until their number goes back under 10%.
The reason for this high demand is that the Melbourne and Sydney property markets are booming right now, so much that the Government has become concerned that it is growing too fast. We don’t like to see the Perth market have to “pay the freight” for the Sydney and Melbourne markets, but that’s how it is at the moment.
What it Means to You
If your home is an owner occupied loan and you are paying both principal and interest, you may actually benefit from this as lenders compete for more owner occupied loans to get their investment loan “numbers” back under 10%. You may be able to refinance at a lower interest rate.
Since costs are going to rise, there is a very good chance that anyone with a variable interest owner occupied loan is going to get a notification telling them their rate has gone up.
If you are looking for an investment loan, call us right now. One day could be the difference between obtaining a loan and not obtaining one.
To learn more, call us today: (08) 9527 1800.