Whoever said that it was hard or expensive to get an investment loan must have been looking for one in their own navel. Many lenders are still actively competing for investors as they have not exceeded the Government Banking Regulator’s 10% investment lending growth ‘speed limit’.
Many lenders are still offering loans to investors at higher loan to value ratios and competitive interest rates. The major banks who have exceeded the Government Regulator’s investor growth limit are getting out of investment loans and some are now spruiking that the investment market is dead. This smacks of If I can’t play I will close my eyes and shout that the property market over. But with so much demand for property in Australia’s two largest cities, Sydney and Melbourne, no one wants to hesitate only to have to pay thousands more for a comparable property next week. Anyone who has attended an Auction in Sydney or Melbourne recently knows that the demand is stronger than ever as are prices.
Here is the tip to getting a good investment loan. Don’t bother going into a bank branch. Don’t bother going to a mortgage broker that is owned by a bank. These places don’t give you a lot of choice even if you are not an investor. Go to an independently owned mortgage broker who has access to a wide range of lenders including non-bank lenders. You will find out that there is plenty on offer for property investors with competitive loan packages to boot. Find more info about what kinds of investment loans are still available here: investment loans
Now that the big banks are out of investment lending they have started talking down the property market prospects, it does not even matter that the data says the opposite. There may be an affordability issue in Sydney but the Melbourne market median house prices are around $200,000 cheaper than Sydney and are just starting to really take off. The most recent property price growth data shows that Melbourne has overtaking Sydney as the fastest price growth city and prices are growing even faster than before. The big banks may be disappointed that they can’t lend to investors in this growing market but this will just give the lesser known lender a chance to show off their investor loans expand their investor market share. These new Government Regulator measure are levelling the playing field for lenders and introducing more competition that is long overdue.
By Dr Nigel Abery (PhD)
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