Investment Loans 95%
- Thread starter albanga
- Start date
Outside of BankWest I don't know of any that have specifically changed their policies. Macquarie did place some limitations above 90% a month or two ago, but I don't think that had any real impact. It's quite possible there's some others that I'm unaware of, above 90% isn't somewhere I go too often.
It hasn't been easy to qualify for a 95% investment loan in years.
It is foreseeable that there could be put in place a general restriction on investment lending above 90% LVR.
It hasn't been easy to qualify for a 95% investment loan in years.
It is foreseeable that there could be put in place a general restriction on investment lending above 90% LVR.
The real question is going to be how lenders will tweak their credit scoring system when dealing with 95% loans.
Its obvious that lenders are making it more difficult to ascertain investment loans.
Its also quite sly of many of the lenders to not provide discounts on investment loans which only increases their margins.
Its obvious that lenders are making it more difficult to ascertain investment loans.
Its also quite sly of many of the lenders to not provide discounts on investment loans which only increases their margins.
I suspect they're already tweaking their credit scoring systems for anything with LMI. We've had an unusual amount of challenges in the last few weeks for applications that I would have thought would normally be fairly straight forward.
I think it'll feed through this way.
Regarding margins - i'm confident that APRA have asked for more capital to be held against investment loans, thereby increasing the funding costs for investment loans relative to PPOR loans. Our regulator wants an 'incentive' based approach as much as possible - and having pricing differentials is trying to rely on incentives to adjust market outcomes.
Nonetheless, change/uncertainty does often lead to profiteering during adjustments, so i suspect there'll be some margin rises.
Cheers,
Redom
I just moved a regional property to ANZ from Westpac and it settles on Tuesday. 95% incl LMI. I'm not sure what their policy is going forward with the new finance changes...
I bought my first couple of places at 95% with Westpac. It was great at the time because i had low amount of resources and it let me into the game. In hindsight i regret it because you can only top up to 90% anyway, so despite my properties going up in value, there was minimal to extract out.
So was it better to not get into the game? I'm a fan of 95% mortgages to start off with, but you need to add value and not just hope that you bought well.
Thanks! It's amazing what you can unlock when you offload some crappy properties from the portfolio.
Has anyone experienced if Bankwest are reducing their LVR to 80% if you have an original 90% LVR with LMI and are looking to release some equity would that initiate a risk re-calc at 80% in alignment with their new policy or would you be able to sustain the already 90% LVR pay the LMI difference and access the available equity?
Youd have a reasonable argument around ethics.........
We are playing a couple around similar lines with other lenders
lets remember that the lenders themselves generally didnt want to go the lower LVR way, it was "suggested" to them as one way to prevent the growth of the Investment book, so it should make sense they will honour existing loans............ history says NO though for alnost all lenders
ta
rolf
This makes me laugh. Banks are profit oriented entities, it's their money and they can do whatever they want within the law.
I'd rather see banks retain more margin to beef up capital against risky investor lending. They are systematically too important not to have their balance sheets strenghtened.
Thanks Rolf.
I was thinking about the ethics of it when I posted the question, but given banks and lenders love to review policies, (to naturally assist the investor
) I was thinking a sneaky way around that would be to employ an internal time frame of say anything outside of the last 12 or maybe 24 months gets the flag for re-assessment under new policy if request for equity release is made.I agree, banks are probably loving the current environment. The last 2 years have been a race to the bottom for lender discounting. Lenders have been giving deeper and deeper discounts for fear of missing out and haven't been backing off. Then along come the regulators, giving them a reason to stop all at the same time. In any other environment they'd be accused of collusion.
no it's not their money when the government has backed them and tolerates monopolistic behaviour. This is a highly protected industry and is in fact more akin to an outsourced government department than free enterprise. The big 4 zombie banks have had more opportunity to 'strengthen' their balance sheet than anybody and their over reliance on bread and butter housing investments as opposed to productive enterprises is a significant part of the problem that this country faces
I don't think that's the problem.
The problem is Aussies only know one thing about making money, and that's property investment. Entrepreneurship is in a coma in this country.
The problem is Aussies only know one thing about making money, and that's property investment. Entrepreneurship is in a coma in this country.
