Loans.com.au woos investors amid CBA-Bankwest moves to shun refinancing

Loans.com.au said it will keep up its focus on the investor market despite recent moves by the Commonwealth Bank and its subsidiary Bankwest clamping down on refinancing by investors.

Marie Mortimer, managing director, said borrowers who are turned away by BankWest or CBA "should come to us instead because we have much lower rates and we still want their business.”

She said loans.com.au had maintained its focus on the market through its investor package which cut rates for investors who brought over both their home loan and investment loan.

“We want people with both a home loan and an investment property loan to come to us so we are offering a market-leading rate on their investment loan to encourage that,” she said. 

The online lender has packages starting from 3.59 percent, compared to most banks’ investor loan rate of 4 percent or more.

Mortimer said BankWest’s move may be the next phase of a retreat from investment lending by the banks.

Bankwest said earlier in the week it will no longer accept applications from new customers seeking to refinance their stand-alone investment lending from other financial institutions.

BankWest said the move would impact a very small number of applications and existing customers would not be affected. 

A BankWest spokesperson was cited by Mortgage Business as saying, “Bankwest continues to assess investment lending applications from current and prospective customers who meet relevant criteria within risk appetite,” they said.

“This aligns with Bankwest’s commitment to supporting a stable national housing market and sustainable economy in line with regulatory guidance.”

Commonwealth Bank, Australia’s largest bank, followed Bankwest in halting applications for new refinancing for investor loans, in a move that could see other lenders in the industry follow.

In a notice to mortgage brokers, CommBank said they are “committed to consistently delivering the best customer experience for home buyers, upholding the highest level of professional standards, and meeting our responsible lending and regulatory obligations,” according to a story published in news.com.au.

Home Loan Experts’ managing director Otto Dargan was cited as saying the Commonwealth Bank had to act to meet the  Australian Prudential and Regulation Authority’s 10 per cent cap on growth in investment lending.

“If they are too far below it (the 10 per cent cap) then they are losing market share,’’ he said.

“If they go over it then APRA will require them to set aside more capital which is very costly for the bank.”

He said CBA had “missed the mark” and had to take immediate action to reduce its investment lending.

Investment home loans represent 35 percent of CBA’s mortgage lending.

Mortimer of loans.com.au added that, “In recent months, a number of lenders have raised their rates or tightened their lending criteria in this space because of fears that they are over-exposed to investors.” 

“But we are excited about the prospects for the investment market and working as always to build long-term relationships with new property investors.”

During the month of December, lending to property investors across Australia grew at 0.8 percent, or at a 10.1 percent annualised rate, she said.