Lender announces new policy for investor loans

Discussion in 'Loans & Mortgage Brokers' started by Peter_Tersteeg, 7th Dec, 2015.

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  1. Peter_Tersteeg

    Peter_Tersteeg Mortgage Broker Business Member

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    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.
     
    Peter_Tersteeg, 7th Dec, 2015
    #1
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  2. Waterboy

    Waterboy Well-Known Member

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    It's their money, who are we to complain?
     
    Waterboy, 7th Dec, 2015
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  3. JacM

    JacM VIC Buyer's Agent - Melbourne, Geelong, Ballarat Business Member

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    Wow indeed too far. They might be close to their threshold and thus just cherrypicking the really low risk loans...
     
    JacM, 7th Dec, 2015
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  4. Wukong

    Wukong Well-Known Member

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    Maybe they've loaded up too much on investor loans and just need to rebalance the books? Like AMP just a couple months ago
     
    Wukong, 7th Dec, 2015
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  5. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    ding


    ta

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    Rolf Latham, 7th Dec, 2015
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  6. Peter_Tersteeg

    Peter_Tersteeg Mortgage Broker Business Member

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    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.
     
    Peter_Tersteeg, 7th Dec, 2015
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  7. Superbird

    Superbird Member

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    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?
     
    Superbird, 7th Dec, 2015
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  8. Jamie Moore

    Jamie Moore MORTGAGE BROKER - AUSTRALIA WIDE Business Member

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    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)
     
    Jamie Moore, 8th Dec, 2015
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  9. Superbird

    Superbird Member

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    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.
     
    Superbird, 8th Dec, 2015
    #9
  10. Azazel

    Azazel Well-Known Member

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    Good times.
     
    Azazel, 8th Dec, 2015
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  11. Jess Peletier

    Jess Peletier Mortgage Broker & Finance Strategy, Aus Wide! Business Member

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    I consider boq a small lender, and given their 2 week turn around I wouldn't touch them at the moment.
     
    Jess Peletier, 8th Dec, 2015
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  12. Jamie Moore

    Jamie Moore MORTGAGE BROKER - AUSTRALIA WIDE Business Member

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    Yep
     
    Jamie Moore, 8th Dec, 2015
    #12