Analyst predicts further lending restrictions

By |
Australian banks are likely to further tighten the criteria they use when assessing loan applications, according to one analyst.

Recent concerns from the Australian Prudential Regulation Authority have seen banks and other lenders already become less accommodating to people seeking finance, but RateCity.com.au banking analyst Peter Arnold believes further steps will be taken.

“With the regulator, APRA, putting the pinch on lenders with investor loan books growing faster than 10%, there has been a range of tweaks to investment product offerings,” Arnold said.

“Some lenders have capped LVR’s for investors, others have restricted which income is assessed in affordability calculations, others have removed discounts to investors,” he said.  

“We expect more action in this space as lenders carefully balance their desire for growth.”

RELATED: Banks told to hold more capital for lending security

While not only becoming less inviting for people seeking loans, the banks have also become less generous as analysis from RateCity shows the banks are pulling back on how much of the official Reserve Bank cash rate cuts they pass on to customers.

According to RateCity, home loan rates fell by 0.26% through the first quarter of 2015, which included the Reserve Bank cutting the official cash rate by 0.25%, while the second quarter of the year saw rates only fall by 0.23%, despite an identical Reserve Bank cut in May.

There still might be some good news for people who have already secured loans, with Norman predicting the Reserve Bank will cut rates again sometime this year.

“The outlook for the second half of 2015 is for another cut,” he said.

“With global uncertainty, namely in the markets of Greece and China, combined with early suggestions that APRA’s efforts to rein in lending for the Sydney and Melbourne property markets are starting to work, the RBA should have room to cut further and spur on the rest of the economy.”    
 

With interest rates at their lowest for more than 50 years, there are some great rates available. The best thing to do is to compare rates from all the lenders. Let us help take the leg work out of doing this - Compare Home Loans now

Top Suburbs : the basin , greenwood , bendigo , albion , geelong west

go back

Get help financing your investment



Do you need help finding the right loan for your investment?


When investing in property, it is important to make sure that you not only have the lowest available rate that you can get, but also have the correct loan features for your needs.

Just fill in a few details below and we'll then arrange for a local expert Aussie Mortgage Broker to contact you and work out what features or types of loans are right for your needs. We'll even help with the paperwork. Plus, our mortgage broking service is at no cost to you.

How soon would you like a mortgage?
What is your Annual Household Income i $
Do you currently own any Investment Properties?
Do you own your own residence?
How much equity do you have in all your current properties?
First Name
Last Name
Where do you live?
What number can we reach you on?
E-mail address
We value your privacy and treat all your information seriously - you can check out our privacy policy here