The fall-out from the Australian Prudential Regulation Authority push to slow down investor lending is continuing to have an effect on borrowers as even more changes to loan arrangements are announced.
According to the Australian Financial Review, Westpac last week notified mortgage brokers that it would be changing arrangements for interest only loans.
In a note sent out to brokers, the bank said it will be reducing the maximum time period for interest only repayments from 15 years to 10 years and that it will require borrowers to be tested on their ability to make full principal and interest repayments after the interest only period has ended.
Currently many lenders are testing the ability of borrowers to make principal and interest repayments over the full life of the loan, rather than over the time frame after the interest only period has ended.
In the note to brokers attained by the AFR, Westpac said the changes were necessary to ensure it met responsible lending requirements.
“These changes are required to ensure Westpac continues to apply responsible lending practices in assessing a customer's ability to service existing and proposed debts,” the note read.
Whether you are looking to buy your first home, move home, refinance, or invest in property, a mortgage broker can help. Access loans from all the major lenders, get help with paperwork – plus there is no charge for this service. Get help from a local mortgage broker
Top Suburbs :
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.
We value your privacy and treat all your information seriously - you can check out