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If you were a lender post apra

Discussion in 'Property Finance' started by Marty McDonald, 10th Nov, 2015.

  1. Marty McDonald

    Marty McDonald Mortgage broker

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    So if you were a lender and had to play by the new rules ie 7.5-8% p&i on all existing and new debts and increased minimum living expenses how do you tweak things to get more business?

    I ask because i believe it will happen in February / March next year now that investment lending is falling off a cliff. Officially down 8.5% last month seasonally adjusted. I'm just not sure I know how the "engineers" will do it.

    Levers
    * price
    * policy ie LVR
    * servicing ??
     
    Shahin_Afarin likes this.
  2. albanga

    albanga Well-Known Member

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    I think we might see a lot more cash back, points, overseas trips.etc used to try and win refinance business.
    As for new investment business then given most here are saying no to serviceability changes I would have to guess LVR (no LMI 85% type deals) and better cash out policies.

    Ofcourse I have no idea though, just throwing it out there :)
     
  3. Redom

    Redom Mortgage Broker Business Member

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    Great question Marty - i think that number may include the reclassifications that are going on.

    Pricing i suspect will be the first thing to come down and equalise over time i believe. This is pretty poor policy and comes at a cost without much of a benefit if the markets slowed. It may be viewed as unnecessary.

    Not sure we'll see so much policy changes back in favour - perhaps little tweaks.
     
  4. Propertunity

    Propertunity Exclusive Real Estate Buyers Agent Business Member

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    You under-report your investor loans by $50Bn. You say you think you are including FHB figures as investor loans too, and you'll get back to them in due course with some updated figures. :D

    I'm still struggling to believe this actually happened. :confused:
     
  5. Gockie

    Gockie I'm an ISTP-A female, so I might be a bit quirky! Premium Member

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    Thanks Alan... well, your answer following on from Redom has just demonstrated a whole other way of interpreting the question posed which I wasn't expecting...
     
  6. D.T.

    D.T. Adelaide Property Manager Business Member

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    I doubt we'll see price changes, and with OFI and living costs locked in I doubt we can see serviceability changes from the out column.

    What about serviceability changes from the in column? Ie increasing the cap on rent or the percentage of rent accepted? Or judging bonuses, overtime or 2nd jobs better?

    They could also look at policy changes like top up purpose, quantity of property, positive/negative gearing add-ons, etc

    Being positively geared and using multiple entities in conjunction with a 5 star broker has greatly lengthened my chain so I'm happy if others can't borrow. Ill take all the houses :p
     
  7. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

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    No speculation is really needed for this question, many lenders have made it clear what sort of business they want and there's plenty of offers around to win those types of business.

    Most lenders are hungry for owner occupied principal and interest loans. The first thing lenders did a few months ago was drop rates for these types of loans, there's currently differences of up to 0.9% between this preferred lending and investment lending in a few cases.

    There's also been cash-back offers for new business and frequent flyer point bonus'.

    There could be policy changes, but these tend to be subtle and are generally implemented as a deterrent for non-preferred business, rather an an incentive for preferred business types.

    Servicing changes are constantly being adjusted, but there's not going to be any significant changes here. Whilst all types of lending are affected by the recent servicing policy changes, the affect been minimal for those with only owner occupied debt.
     
  8. See Change

    See Change Timing Lord Premium Member

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    Does anyone know if they have a state by state breakdown of those figures .

    I find it quite easy to believe that much of the drop occured in Sydney and to a lesser extent Melbourne .

    Cliff
     
  9. Gockie

    Gockie I'm an ISTP-A female, so I might be a bit quirky! Premium Member

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    I could... but maybe work secret!!
     
  10. euro73

    euro73 Well-Known Member Business Member

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    Last edited: 15th Nov, 2015