Join Australia's most dynamic and respected property investment community

ANZ raises investor home loan rates

Discussion in 'Property Finance' started by turk, 23rd Jul, 2015.

  1. turk

    turk Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    201
    Location:
    Victoria
  2. D.T.

    D.T. Adelaide Property Manager Business Member

    Joined:
    13th Jun, 2015
    Posts:
    5,598
    Location:
    Adelaide, SA
  3. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

    Joined:
    18th Jun, 2015
    Posts:
    9,043
    Location:
    Sydney
    Dreadful news.
     
  4. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

    Joined:
    18th Jun, 2015
    Posts:
    2,109
    Location:
    Melbourne, Nationwide
    Thanks APRA.
     
  5. channon

    channon Member

    Joined:
    18th Jun, 2015
    Posts:
    22
    Location:
    Sydney
    Question now is, will others follow suit.....
     
  6. Be Developer

    Be Developer Property Developer Business Member

    Joined:
    19th Jun, 2015
    Posts:
    1,078
    Location:
    Australia
    is it really case of APRA or banks saying to Property investors, you are making money, give us our share????
     
  7. keithj

    keithj Moderator Staff Member

    Joined:
    14th Jun, 2015
    Posts:
    177
    Location:
    Blue Mtns
    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.
     
    Jingo and Veech like this.
  8. Kinnon Bell

    Kinnon Bell Finance Broker

    Joined:
    14th Jun, 2015
    Posts:
    478
    Location:
    Cairns
    APRA or thinly veiled attempt at capital raising in response to Basel III?

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

    Redom Mortgage Broker Business Member

    Joined:
    18th Jun, 2015
    Posts:
    863
    Location:
    Sydney (West) and Canberra
    APRA. Incentives.

    Incentives that might actually change behaviour.

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

    Peter_Tersteeg Finance broker and strategist Business Member

    Joined:
    18th Jun, 2015
    Posts:
    2,109
    Location:
    Melbourne, Nationwide
    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.
     
    Last edited: 23rd Jul, 2015
  11. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

    Joined:
    18th Jun, 2015
    Posts:
    9,043
    Location:
    Sydney
    Wasn't some asking the other day if things could get worse?
     
    aussieB likes this.
  12. Redom

    Redom Mortgage Broker Business Member

    Joined:
    18th Jun, 2015
    Posts:
    863
    Location:
    Sydney (West) and Canberra
    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
     
  13. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

    Joined:
    18th Jun, 2015
    Posts:
    2,109
    Location:
    Melbourne, Nationwide
    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.
     
    sumterrence likes this.
  14. SaberX

    SaberX Well-Known Member

    Joined:
    29th Jun, 2015
    Posts:
    197
    Location:
    WA
    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?
     
  15. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

    Joined:
    18th Jun, 2015
    Posts:
    9,043
    Location:
    Sydney
    ANZ appear to want people to refinance out their investment loans so that they can 'balance their books' more in favour of owner occupied.
     
    WattleIdo and sumterrence like this.
  16. Redom

    Redom Mortgage Broker Business Member

    Joined:
    18th Jun, 2015
    Posts:
    863
    Location:
    Sydney (West) and Canberra
    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
     
  17. Redom

    Redom Mortgage Broker Business Member

    Joined:
    18th Jun, 2015
    Posts:
    863
    Location:
    Sydney (West) and Canberra
    Doubt it. They've just moved first.

    Others will follow.
     
  18. Tony Fleming

    Tony Fleming Well-Known Member Business Member

    Joined:
    18th Jun, 2015
    Posts:
    546
    Location:
    Sydney
    If the main banks do this I can see rents rising in response
     
  19. 2FAST4U

    2FAST4U Well-Known Member

    Joined:
    3rd Jul, 2015
    Posts:
    925
    Location:
    Adelaide
    Seems like a blatant cash grab from ANZ. It wouldn't surprise me to see the other Big 4 follow suit.
     
  20. S.T

    S.T Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    428
    Location:
    I'm not selling anything
    Might have to buy one new PPOR a year now!
     
    Jess Peletier likes this.