Join Australia's most dynamic and respected property investment community

Lender announces new policy for investor loans

Discussion in 'Property Finance' started by Peter_Tersteeg, 7th Dec, 2015.

  1. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

    Joined:
    18th Jun, 2015
    Posts:
    2,094
    Location:
    Melbourne, Nationwide
    This is a little out of the blue. We all know that lender are restricting investment loans, but I'm wondering if this is going a bit too far...

    Lender announces new policy for investor loans

    To paraphrase, CUA has restricted all new investment lending (variable and fixed) to 70% LVR. No change to owner occupied loans or existing investment loans.

    Previously CUA has competed on cheap rates and reasonable assessment policies. Unfortunately this pretty much puts them out of the investment market and makes it harder for existing customers to continue to invest. No more equity releases for a while.
     
    Xenia likes this.
  2. Waterboy

    Waterboy Well-Known Member

    Joined:
    29th Aug, 2015
    Posts:
    326
    Location:
    Sydney
    It's their money, who are we to complain?
     
  3. JacM

    JacM VIC Buyer's Agent Business Member

    Joined:
    12th Jul, 2015
    Posts:
    1,106
    Location:
    Melbourne, Australia
    Wow indeed too far. They might be close to their threshold and thus just cherrypicking the really low risk loans...
     
  4. Wukong

    Wukong Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    210
    Location:
    NSW
    Maybe they've loaded up too much on investor loans and just need to rebalance the books? Like AMP just a couple months ago
     
    York likes this.
  5. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

    Joined:
    14th Jun, 2015
    Posts:
    1,160
    Location:
    Gold Coast
    ding


    ta

    rolf
     
  6. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

    Joined:
    18th Jun, 2015
    Posts:
    2,094
    Location:
    Melbourne, Nationwide
    It wouldn't surprise me if they're doing this at this point because they've seen a flood of refinances form investors lately away from all the other lenders. The more mainstream lenders put their rates up, people move to the smaller lenders, the smaller lenders introduce their own restrictions a few months later because now the hammer is falling on them.
     
    Perthguy likes this.
  7. Superbird

    Superbird Member

    Joined:
    29th Nov, 2015
    Posts:
    15
    Location:
    Sydney
    Is it likely smaller lenders would jack up their rates as they over exposed themselves?
    I guess an advantage they have is that they're not subject to the new apra capital requirements?
     
  8. Jamie Moore

    Jamie Moore MORTGAGE BROKER - AUSTRALIA WIDE Business Member

    Joined:
    18th Jun, 2015
    Posts:
    2,141
    Location:
    Canberra and Sydney
    I wouldn't be surprised. The lending environment is a tad unpredictable these days.

    Lenders like CUA announcing such a dramatic policy change goes to show that rate shopping can be detrimental.

    I'm sure they captured plenty of rate sensitive investor clients - and now those investors are going to struggle with releasing equity (unless they've got a lowish LVR to begin with)
     
  9. Superbird

    Superbird Member

    Joined:
    29th Nov, 2015
    Posts:
    15
    Location:
    Sydney
    Thanks Jamie. I've been shopping around at the moment. Would you consider BOQ a small lender? Or on par with Bankwest?

    I wish there was a website that provides a summary of all the lenders out of cycle rate movements.
     
  10. Azazel

    Azazel Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    8,113
    Location:
    Brisbane
    Good times.
     
  11. Jess Peletier

    Jess Peletier Mortgage Broker - Australia Wide Business Member

    Joined:
    18th Jun, 2015
    Posts:
    2,758
    Location:
    Perth WA
    I consider boq a small lender, and given their 2 week turn around I wouldn't touch them at the moment.
     
  12. Jamie Moore

    Jamie Moore MORTGAGE BROKER - AUSTRALIA WIDE Business Member

    Joined:
    18th Jun, 2015
    Posts:
    2,141
    Location:
    Canberra and Sydney
    Yep