Bankwest increases maximum LVR to 90% for investor loans

The post Bankwest increases maximum LVR to 90% for investor loans appeared first on Oak Laurel.

Bankwest increases maximum LVR to 90% for investor loans

A sign that the housing bubble fears and financial system risk are over (or were overblown in the first place). Bankwest is one of the first Bank lenders to start relaxing lending policy for investors. The push from the Australian Prudential Regulatory Authority (APRA) has previously caused Banks and lenders to tighten their lending policies, especially to property investors to contain the growth in investment lending below 10%.

Well it appears that APRA have been too successful, well as far as Bankwest is concerned. As a result of the APRA crackdown, Bankwest had reduced the maximum loan to value ratio for investment lending to 80%.  Now Bankwest have increased their maximum loan to value ratio to 90% including lenders mortgage insurance.

With the crackdown on investment lending by APRA, the major Banks and some other lenders had changed their policies to implement measure to discourage investment or risky lending including: tighten borrowing capacity calculations, increases interest rates for investors and reducing the maximum loan to value ratios available. Some have suggested that the approach to containing investment lending was an opertunity for the major Banks and some other lenders to price gouge with rises in interest rate for investment loans netting the major Banks many millions in profit. However, after raising their investment loan interest rate many Banks also decreased their owner occupied home loan rates for new borrowings.

One might question that if the regulator believed that there is a higher risk in the property market that encouraging owner occupiers to enter the market or borrow more is a prudent thing to do. I believe that messing with the property market using such blunt instruments as nation-wide investment loan interest rate increases and reduced maximum loan to value ratios was the wrong thing to do to contain what was essentially a Sydney based property market risk. I believe that these blunt measures have impacted the Australian economy when they needn’t have. When in time we look back on these events most reasonable economists and policy makers will agree that is was the wrong thing to do. Banks are very good at managing risk and restrict lending or loan to value ratios in locations (based on postcodes) where they see higher risk. Measures like loan to value ratios could have and infact are being used to manage risk.

Bankwest investment loans currently still have interest rate premiums over owner occupied home loans. However, the increase in maximum loan to value ratio for investment loans is a first step towards normalisation in the lending market.

 

Looking for higher loan to value investment loan options?

There are still a range of lenders that are offering higher loan to value ratios for investment loans. Do you want to compare your investment property loan options? Ask us!

Has your investment loan interest rate increased?

Make sure that you are still getting a competitive investment loan. Get an investment property loan review!

 

Don’t delay act NOW!

+614 30129662

Oak Laurel – Investment property loans made easy!

Oak Laurel Mortgage Broker

Share!
Share On Twitter
Share On Linkdin
Share On Pinterest
Share On Stumbleupon
Share On Reddit

The post Bankwest increases maximum LVR to 90% for investor loans appeared first on Oak Laurel.

from Oak Laurel | RSS Feed http://ift.tt/1QoHPyX
via IFTTT

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s