ANZ and CBA slug their property investor customers: Jason Khoury

GUEST OBSERVER

Not since 1998 have banks charged a higher rate for investment property loan as compared to owner-occupiers. You may have seen the news that ANZ have decided to slug heaps of their mortgage clients. Independent of any RBA movement, they are increasing the standard variable rate by 0.27% for investment home loans.

Unfortunately, CBA today announced the same thing. The interest rate for existing variable investment CBA home loans will rise by 0.27% from August 10th. 

The stance of iChoice is that these tactics are opportunistic, and ANZ & CBA clients should think again. 

The APRA directive is for investment lending growth to be limited by 10%. So the unpublished interest rate discounts offered to us high-end brokers will be stronger for those taking a loan against their home. We have accepted this, in fact since some banks are much more flexible than others (some not discounting at all) the importance of a knowledgeable broker is becoming more apparent.

So why are ANZ & CBA slugging EXISTING clients, if the APRA directive related only to growth? These questions should be asked. The beauty of some banks is that their home loans, whether for a home or an investment, is actually the same product, so they wont have the ability to pinpoint the investors to discriminately slug them. maybe check your statement and see if the name of your product includes the word ’investment’.

So will this intervention in market forces negatively affect the run of the property market? Will cashed-up foreigners be laughing as local investors get further priced out? What we do know immediately, is that CBA clients with an Investment Home Loan will be fuming as they watch the news tonight, like ANZ customers were last night!

iChoice will be emailing our client base with facilities at ANZ and CBA this weekend with our recommendation for next steps.

Off-the plan buyers know that some banks lend against the valuation at completion (not the LOWER of purchase price and valuation like the nasty banks). I say this because I have heard of many people getting slugged with thousands of dollars of LMI because they just don’t know (do they know that us mortgage advisors are free??). 

Also, Westpac for a limited time are lending 85% with no LMI, for purchases OR refinances but applications must be in by the end of August.

As usual, Citibank have an 85% no-LMI as their standard, and great fixed rates too.

As an acclaimed Flame broker, I can often lend 90% with no LMI to doctors, pharmacists, dentists, vets, accountants, barristers and solicitors.

Jason Khoury is principal, iChoice Mortgage Brokers and can be contacted here.