A subsidiary of one of Australia’s biggest banks will require investors to stump up more of their own money when applying for finance to buy properties.
Commonwealth Bank of Australia (CBA) subsidiary Bankwest has hit all investor mortgages with an 80% loan-to-valuation ratio cap.
Bankwest hopes to curb the current rapid lending to property investors, which it believes is leading to an overheated property market.
Bankwest’s LVR means that potential investors will need to provide 20% of the property purchase price as equity before a loan will be approved.
Bankwest aren’t on their own in tightening the lending market for investors, with banks across Australia writing to mortgage brokers to advise them on policy changes.
The AFR revealed this week that ANZ sent a private note to brokers advising them that investors would be receiving different interest rates on their loans.
"Our appetite for investment loans has changed. Unfortunately, given the current environment, we can expect to see customers with different lending rates across different products," the note from ANZ’s Keiran Evans read.
The AFR also revealed that in a similar note, NAB warned brokers that “investment loans will not be eligible for any pricing discretion."
These moves by the banks will also allow them to comply with the expectations put down by the Australian Prudential Regulatory Authority, with bank lending having outpaced the prudential regulator's 10% limit in the annual pace of housing investor loan growth.
Do you have more than $200k in your super fund? You could use your super to buy property - Find out how
Top Suburbs :
Get help with your investment property
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 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 and appointment is free.
We value your privacy and treat all your information seriously - you can check out