Getting loans for investment properties is going to get a bit more expensive. CBA has recently announced that it will be raising rates on loans for investment properties. Variable rates for investor home loans will go up by 27 basis points bringing the rate up to 5.72 percent.
Investment Loans – Rising Rates
Fixed rates for investor property loans will also be going up. A five year fixed rate loan will go up to 5.04 percent, a rise of 10 basis points. The one, two and three year fixed rate loans on investor homes will be climbing 30 to 40 basis points.
On the other hand, owner occupier home loans have experienced another drop. Fixed rates on owner occupier home loans have gone down by up to 30 basis points bringing the rate to below 5 percent. As of July 22nd, the three year fixed rates dropped by 20 basis points coming to 4.64 percent. Two year rates will fall by 10 points to settle at 4.64 percent as well. The biggest drop in fixed rates on owner occupier homes will be the 30 basis point drop to 4.84 percent on four year loans.
Despite these recent changes to variable and fixed rates on loans on investor homes there has been an increase of loan approvals for investment properties in Australia in the last 12 months. Even with all of the recent changes to investor lending policies the rate of loan approvals has risen by 22 percent in just the last year.
Banks are seeking to find a balance between owner occupied home loans and investment property loans on their books. The changes in the pipeline set out by the APRA have caused banks to take drastic measures to make sure their books will be balanced when the new rules on investor lending caps begin next year.
Banks need to do whatever they can to increase the amount of owner occupied home loans compared to investment home loans. Other banks reported that they are reviewing their policies and rates and will do whatever is needed to meet the APRA’s standards.
Rising rates on investment home loans will likely be the norm for the near term. The big banks are where many investors turn for their home loans but there are other options. Institutions such as the Australian Lending Centre offer rates on investment home loans that are competitive with the big banks and can suit any investor. Enquire online now to find the most suitable investment loans for you today.
