Powered by MOMENTUM MEDIA
subscribe to our newsletter

Non-major increases rates on investment loans

A Queensland-based bank has announced that reference rates for investment home loans will increase by 13 basis points from tomorrow, and the maximum LVR on new investment loans will decrease.

Auswide Bank has announced that reference rates for investment home loans will increase by 13 basis points (0.13 per cent) from 5 April 2017 and that it is also reducing the maximum LVR on new investment loans.

Managing director, Martin Barrett said customers with an investment home loan paying the bank’s new standard variable rate of 5.85 per cent on a $250,000 loan will see their repayments increase by $20.68 a month (principal and interest home loan over 30 years).

“Of course many of our investment loan customers are on rates less than the standard variable rate based on the size of their loan and any mortgage package they may have qualified for,” he said.

He added that the decision protects the bank’s position in balancing its funding costs and lending income.

Advertisement
Advertisement

“As we recently reported to the market, our operating margin continues to sit just under 2 per cent, as it has done for many years,” Mr Barrett commented.

The rate increase and a decision to reduce the maximum acceptable LVR to 90 per cent or less on new investment home loans reportedly "reflects recent market conditions and prudent management of the bank’s lending in the current environment".

“We’ve witnessed a host of lenders, both large and small, bank and non-bank, all announce similar responses in respect to rate and lending policy over the last few days and weeks," he said.

Mr Barrett announced Auswide Bank has also launched a new 12-month term deposit rate of 2.75 per cent with interest paid on maturity.

“At the end of 2016, 63 per cent of our funding was sourced from retail depositors, so it is important we attract new deposits to support both our existing lending and growth objectives,” he said.

PROMOTED CONTENT


[Related: Non-major sees drop in loan approvals]

Non-major increases rates on investment loans
mortgagebusiness

If you’re feeling overworked and overwhelmed in this fast-paced mortgage market, it’s time to make some changes, and the Business Accelerator Program can help! Early bird tickets are on sale now. Work smarter, not harder, this year.

Annie Kane

Annie Kane is the editor of The Adviser and Mortgage Business.

As well as writing about the Australian broking industry, the mortgage market, financial regulation, fintechs and the wider lending landscape – Annie is also the host of the Elite Broker and In Focus podcasts and The Adviser Live webcasts. 

Contact Annie at: This email address is being protected from spambots. You need JavaScript enabled to view it.

Latest News

Several lenders, including the major banks, have announced relief measures for Victorian borrowers impacted by the floods. ...

The major bank has forecast an RBA tightening in two steps in H2 2023 to take the official cash rate to 0.5 per cent by the end of 2023. ...

Housing-related consumer sentiment has plummeted by 27 per cent since November 2020, and is in pessimistic territory for the first time sinc...

How long do you think it should take to discharge a mortgage?

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.