How recent investment changes can impact your situation
Most Australian Lenders have already, or will be increasing their new and existing investment loan interest rates. The recent announcement by Westpac has already created a stir.
If you have a mortgage, or are about to sign up for one, this new development is likely to have an impact on you.
Chief Executive of the Finance Brokers Association of Australia (FBAA), Peter White recently recommend that homeowners consider switching to a fixed mortgage rate, as he believes that all the major banks will, sooner or later, follow Westpac’s lead.
This sentiment is supported by the NAB Chief Executive Andrew Thorburn, who was recently quoted as stating that NAB’s mortgage rates are under review. (news.com.au 15/10/2015)
According to Paul Gregory from Ethical Home Loans, the highest rate increase for existing investor loans to date (22/10/2015) is AMP Bank, who have increased their rates by 0.46%. Paul also points out that Adelaide Bank remains one of the lowest with a 0.20% increase to existing investor borrowings.
What does that mean for you?
If you have a mortgage or an investment property
If you own a home or property now is a good time to review your rates and shop around for the best deal.
If you are looking to buying
A pre approval is great, however, if you are looking to buy an investment, even a 2 month old pre approval may not be worth the paper it is written on, as the lending criteria has changed. Speak to your bank or a mortgage broker before writing an offer.
If you are looking to sell
Consider who is likely to buy your property. If your property is an ideal investment (such as a 39sqm 1 bedroom unit) or it comes with a tenant and a long lease, it may be more difficult to attract an investor in the current Perth real estate climate.
Related articles:
Are you protected when accepting an offer?
5 Reasons to sell your Perth investment property
5 Tips on home presentation when selling
Selling before buying vs buying before selling
Buyer beware – before it is too late
7 Tips on how to choose the right real estate agent
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