CBA has done it too. 27 points August 10th

It doesn't change your discount, but it does change the standard variable rate, so all investors with the CBA and ANZ are affected.

 

Put yourself in the shoes of the bank - you're limited in the amount of credit you can advance to a certain class of borrower so of course as long as there is demand for it you can increase prices.... it's exactly what happens when markets adjust to 'interventions' in an otherwise free market. (Well, as free as a regulated banking industry can be).

As an aside, it is interesting the politicians and tabloids have been silent on this one. Usually they are chastising the banks when they raise rates outside/more than RBA...

 

Changes to Fixed Rates for Investment Home Loans
We are increasing Fixed Rates for new Investment Home Loans effective from Friday 31 July 2015 as follows:
The 3 Year Fixed Rate is increasing by 0.40% to 4.89% p.a.

If I complete the CBA form to switch to Fixed for a Investment Loan coming Monday 27 July, will I get 4.49% 3 Year fixed?

 

Can you do it through Netbank now and see what rate is quoted there?

 

let me try netbank... spoke with my broker, he is unsure if CBA could deliberately slow down the processing or there will be a genuine flood of switch request that may cause a delay.

 

Oh yuck, these rates are in between Pre and Post APRA..
The 5 year on Netbank is worst then the Post APRA rates.

 

Nothing wrong with that
don't we increase rents when the opportunity arises?

 

My simple question would be in all this is when will these changes to the investor lending market stop??

After a consistent decrease in investment over an extended period to rebalance their books?

 

I dont understand why people even go to ANZ or CBA. They always have the highest rates.

 

Because rate isn't everything when you want to build a substantial property portfolio.

 

In other words, it depends on whether the better lenders said yes or no.

 

How do you determine a 'better' lender?

The real factor that most investors don't realise is that finance isn't about the first placement of the deal, it's factoring in the long term transactions which will place later. You can plonk a loan with a lender offering 4% rate, likewise another with 5%. Many on face value will determine the lower rate to be the superior offering.

But what about if that 4% p.a loan doesn't allow you to draw out 400k equity a few years later to make your next 5 purchases? Or if you intend to develop the security and the lender refuses to allow this?

Rate is but one of a dozen factors which need to be taken into consideration in equation to achieve your LONG TERM goals.

 

Good point but most do.

 

So would commbank still be considered one of the earlier ones to use for first couple of IP's or is the landscape just so different now that the reasons they were good early on (rates aside) have now diminished to the point that its better to look elsewhere?

 

Better to talk to a broker as everyone's goals are different to one another and with all the new changes feel sorry for the brokers that need to be on top of the changes.

 

@Redom
I was actually just thinking about the changes to LVR and thought about OTP.
If all lenders follow suit with Westpac then what on earth will happen to all the investors who purchased thinking of a 90-95LVR and settle after they are introduced?

I can only see a few options:
A - Lose your deposit
B - Ask a family member to guarantor the loan
C - change your plans and move in hence buying under OO rules.
D - Same as above but upon settlement have a change of heart and rent it out.

Now I am not sure of the legal ramifications of D but given A,B and C are not great alternatives then what other options would buyers have?

 

Brokers have their place and you can feel sorry for them at times like this but there are cganges to banking requirements all the time.
This is a forum for discussion though and it seems a bit strange to send someone off to a professional for simple questions. A newbie might need a broker and they might not. Sure, a broker is needed when it would be difficult to get a loan without one. Bigger portfolios and developers need them, yes.

 

Just called CBA, entire portfolio is with them pretty much.

I could do with some insights on my options detailed below, if anyone has any! !

I have 3 variable mortgages with CBA:

219,000 @ 4.45%
432,000 @ 4.45%
248,000 @ 4.45%

I was told by my broker today that if I fix before end of month and pre-bank-changes, the fixed rates I can move these loans in to are:

1, 2, or 3 years: 4.49%
4 years: 4.69%
5 years: 4.79%

I'm thinking of going for 2 years at that first rate, only 0.04% higher than what I'm on ow

If I do nothing this week and after Aug 1st, either variable or fixed scenarios presented to me, both suck (my variable loans at 4.45 would go up 4.72%, and the fixed rates at that point will be offered starting at 4.79%).

FYI re: the two offsets I have (wedged against two of these loans..) I would ordinarily lose them once i go fixed, so if i fix these three, I will just glue them to some other CBA variable loans I have (these loans I'll keep variable even with the 0.27% increase, because I got such cheap rates on these to begin with, that I am still ahead).

Thoughts?
Ps I don't want to change lenders for any of these loans, want to keep all of this in CBA as I have other non-CBA stuff going on outside of this.

 

@C-mac I am in similar loan size and situation as you with CBA, though 1 loan is already in a fixed of 3 yrs. Considering fixing 1 more on 3 yrs, and leaving 1 in variable and move all offset the 1 variable.
Have similar loan size with NAB, I feel their announcement will be out next week of similar, so intend same/similar.

I try not fixed 1 loan, but the sub/topup loan variable. I would sync up the loans..

I also ask the question, which property I likely to sell for whatever reason, and which property has growth in the next few years.

I also ask my wife if she intends to stay with me for next 3 years

 

Because the new rates don't apply to owners occupier loans. Owner occupier mortgagors are the headline audience of these politicians and tabloids when it comes to rates.

Property investors are portrayed as villains trying to speculate and push out FHBs. So this could actually be a "good news" for them to report. Good news is of course unpalatable in tabloids so they won't place them in the front page.