ANZ raises investor home loan rates

Just the beginning??

ANZ Banking Group is raising interest rates on home loans held by property investors by 0.27 percentage points in response to a regulatory speed limit on housing investor credit growth, and "market conditions".

http://www.theage.com.au/business/b...by-027-percentage-points-20150723-giiw2q.html

 

Or directly from ANZ

http://www.media.anz.com/phoenix.zhtml?c=248677&p=irol-news&nyo=0

 

Dreadful news.

 

Thanks APRA.

 

Question now is, will others follow suit.....

 

is it really case of APRA or banks saying to Property investors, you are making money, give us our share????

 

The important take out from this is that it is highly likely the other 3 majors will also be raising Fixed Rates for Investors & not OOs (ANZ has raised 0.30%). If you're inclined to fix, then IMO now is the low point in the cycle for investors.

 

APRA or thinly veiled attempt at capital raising in response to Basel III?

Or, as I suspect, a combo of everything combing.

 

APRA. Incentives.

Incentives that might actually change behaviour.

Don't think BaselII was about differentiation of segments of market.

 

Several lenders already did this months ago (NAB & Macquarie immediately come to mind). ANZ's increase is significantly larger though. This now prices them so far above the competition it literally wipes them off the investor lenders panel.

I also suspect that lenders are taking this opportunity to make some extra profits. For the last 2 years everyone has been negotiating special deals for almost every loan. The regulators have given the banks an excuse to cease this practice across the board, but without having to collude with each other on their pricing.

My understanding is that lenders costs are fairly uniform for both owner occupied and investment loans, so there's decent profits available to lenders to charge investors extra. If they did this to owner occupiers, there'd be outrage.

 

Wasn't some asking the other day if things could get worse?

 

Yes they will.

I called it a few weeks ago on the lending market changes post, but thought it'd happen along with interest rate changes.

The incentives to change behaviour is definitely APRAs favourite button to push. Its also a pretty smart way to do it without creating too many spillover costs.

The last changes were way to small to do anything. I only suspect the differences will get larger and larger over time, esp if rates are cut.

Cheers,
Redom

 

I don't think anybody has actually specifically mentioned this yet, and The Age article didn't pick up on it either...

The ANZ is raising their index rate for investment loans by 0.27% from 5.38% to 5.65%. This means that this change will effect all ANZ investment loans, not just new loans.

Not only does it affect the interest rate of an ANZ investment loan, but it will also likely affect the affordability for any ANZ loan, if you have existing or proposed investment debt.

It wouldn't surprise me if the other first and second tier lender follow suit. The smaller lenders are going to have a field day with this.

 

Redom - I always thought banks were ahead of the yield curve when it came to fixed rates, so any attemp to outplay them on that matter (low point or not) was pointless as they likely take into account all forseeable interest rate movements into the future to allow you to fix at those rate %'s.

That said things do happen, but i guess it would be a gamble on something upsetting forecasts now which nobody knows. Only other reason I see is predictability of servicability repayments as not all are good with handling their money/discipline month to month?

Or am I missing another consideration?

 

ANZ appear to want people to refinance out their investment loans so that they can 'balance their books' more in favour of owner occupied.

 

My phone has gone nuts - ah they've changed their index rate, thanks Peter. It'll be a long night!

In terms of questions i'm getting:

THIS IS TEMPORARY. Pricing differences are simply to cool investment lending.

Incentive effects are temporary controls.

LVR caps are temporary (St George, Westpac, others to follow shortly).

Serviceability changes...permanent i think. Changes are 'fixes' to issues in prudent lending.

Cheers,
Redom

 

Doubt it. They've just moved first.

Others will follow.

 

If the main banks do this I can see rents rising in response

 

Seems like a blatant cash grab from ANZ. It wouldn't surprise me to see the other Big 4 follow suit.

 

Might have to buy one new PPOR a year now!