I’m sending this to give you an update on lending interest rates, which you may have been aware are moving a LOT at the moment. A summary is as follows:
- Banks are facing increased regulation from the authority that oversees lending (called APRA).
- APRA is increasing regulation to try and cool the property market in Sydney and Melbourne. It’s been trying to do this for a year and a half and has not been particularly successful
- The banks are saying that this increased regulation is causing them to be less profitable, so they are having to put their rates up to compensate (whether this is actually true or not is unknown!)
- As a result, investors are getting charged more. So,
- If your loan is an owner occupied loan on P&I (principal and interest), there will be little change to your rates (some banks have pushed these up by 0.03%)
- If your loan is owner occupied on IO (Interest Only) some lenders (including CBA and ANZ) have pushed IO rates up by0.20% to 0.25%. If you fall into this category, please contact me if you’d like to switch to P&I.
- If you have investment properties on either P&I or IO, your rates will be increasing from 0.20% to 0.31%, depending on your lender.
These rate increases are occurring at every bank, so comparatively you are no worse off.
I will be assessing and reviewing the loans on my books to ensure no-one is too adversely affected by their bank’s rate decision.
Please don’t hesitate to contact me if you have any questions or concerns.