Commercial Loan Update October 2016

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The past month has seen variable commercial property loan interest rates fall inline with the Reserve Bank of Australia’s decision to reduce interest rate in August. Fixed rates have also fallen but we see a slight increase in the 5 years fixed rate across the board.

Similarly, low doc commercial rates and business loans have followed a similar trend.

To view more information regarding commercial lending please visit our commercial loans website.

 

Lender Loan Type Security Type Interest Rate Max LVR
Bank Variable Residential Security 4.29% 80% Enquire
Bank Fixed Rates From Residential Security 4.29% 80% Enquire
Bank Variable Rates From Commercial Security 4.49% 60-75% Enquire
Bank Variable Rates to $1,000,000 Commercial Security 4.59% 60%-80% Enquire
Bank Commercial Equity Loan From Commercial Security 6.75% 60% to 75% Enquire
Bank 1 Year Fixed Rate From Commercial Security 4.60% 75% Enquire
Bank 2 Year Fixed Rate From Commercial Security 4.70% 75% Enquire
Bank 3 Year Fixed Rate From Commercial Security 4.70% 70-75% Enquire
Bank 5 Year Fixed Rate From Commercial Security 5.04% 75% Enquire

Please Note: that the above interest rates are only examples at the time of publication. Interest rates vary according to security type, property type, borrow amount against the property’s value, loan amount, location, use and purpose. Please speak to a qualified commercial lending specialist to see if you qualify for any of the interest rates shown above.

For more information regarding commercial lending please visit our commercial loans website.

Our advisers can source commercial finance from the big banks plus many other lenders  that cannot be found on the internet.

 

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August Interest Rate Cut to 1.5%

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After speculation that the Reserve Bank of Australia was going to reduce interest rates by 0.25% due to low inflation they have decided to reduce rates to 1.50% – a historic low.

It is expected that the major banks and other lenders will not pass on the full 0.25% rate cut but we will monitor their interest rate decisions for home loans, property investment loans, business loans and commercial property loans.

If you have any questions about the announcement or interest rates, please feel free to contact us.

To view and compare current home loan and investment loans click the link below.

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Interest Rates Stable For July 2016

Three days after the 2016 election The Reserve Bank of Australia has today announced that it has decided to keep the cash rate on hold at 1.75% . There is a very strong chance that  variable interest rates are likely to fall next month but we will have to wait and see.

We expect that most lenders will leave their variable interest rates unchanged but we will continue to monitor lenders for rate changes outside the official rate. We will also keep to up to date with commercial loan interest rates.

If you have any questions about the announcement or interest rates, please feel free to contact us.

To view and compare current home loan and investment loans click the link below.

Current Bank Interest Rates Rate Cut and Date
Adelaide Bank / Bendigo Bank No Change Announced
AMP No Change Announced
ANZ No Change Announced
Bank of Melbourne No Change Announced
Bank of Queensland No Change Announced
BankWest No Change Announced
Citibank No Change Announced
Commonwealth Bank No Change Announced
ING Direct Bank No Change Announced
ME Bank No Change Announced
Heritage Bank No Change Announced
NAB No Change Announced
St George Bank No Change Announced
Suncorp Bank No Change Announced
Westpac No Change Announced

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Suncorp Bank Special Offers

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Suncorp Bank from Wednesday 13 January they are offering the following for New Home Package Plus offers;

  • – discounts of 1.55% p.a. on Standard Variable loans over the life of the loan, available for owner occupied and investment lending
  • – 0.35% p.a. discount on 3 Year Fixed Rate loans, also available for owner occupied and investment lending.
  • – waiving the Home Package Plus annual package fee for the first year (normally $375) for new Home Package Plus customers taking out new lending of at least $150,000

For more information contact us to take advantage of this offer.

Follow the link to compare home loans from these lenders and the Australian mortgage market.

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Property Investment Loans – New Regulations Shake Up Lending

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In the last months we have seen lenders tightening up their lending to property investors for both existing and new customers.

The Australian Prudential Regulation Authority (APRA ) recently moved to tighten lending criteria for property investment loans, many lenders are forced to reduce their lending risks.

 Why?
The reason for the stricter lending criteria is that APRA set a benchmark of 10% maximum growth for residential investment mortgages. The big banks were beginning to exceed this benchmark level and APRA had to take action.

By taking these measures, APRA is attempting to make the property market conditions safer for consumers. Rapid growth in property investment lending can be perceived as risky as investors may be placing ‘all their eggs in one basket’ rather than having investment diversification.

Lending criteria to reduce growth varies from lender to lender but we have seen changes across the board from banks to non banks. Some have already implemented the changes while others will be applying them soon in the coming months.

What do the changes mean for investors?
While banks and other non bank lenders have announced varying policies here is an overview of some of the measures that have been put in place for both new and current borrowers:

Stricter criteria to approve investor loans
This includes excluding certain properties for investment purposes. For example, not lending in certain postcodes or types of properties that are deemed high risk. Rural properties and high density apartments are prime examples.

Increased Interest Rates for Investment Loans
We have seen an increase in investment loan interest rates from the major banks and non-banks. This means that banks are no longer offering discounts for investment loans as they previously did and packaged.

Lenders are also penalising borrowers with “interest only” loans but will offer a discount for property investment loans that are paid with “principle and interest” repayments.

Deposits raised up to 20%
Lenders have also increased the required deposit. Previously, property investors could borrow up to 95% of the property’s value but some lenders require a 20% deposit where they can only borrow up to 80% of the property’s value.

Some lenders are not allowing investors with a current investment property to use the existing equity in that property to leverage for further investments where the LVR falls outside the 80% LVR benchmark – effectively forcing them to refinance.

Rental Income For Servicing Decrease
Lenders have reduced the amount of rental income taken into consideration when assessing an applicant’s income. Some have also taken out the negative gearing component in the assessment. This means that property investors will need to show other income outside their property investments to obtain a loan if servicing the loan is tight.

What do the changes mean for owner occupier buyers?
Predictions are that the owner occupier market will increase as a result of tightened criteria for property investment loans. Many lenders have recently announced a raft of changes to new owner occupier loans including lower interest rates, cash back offers and the waiving of annual fees.

Where to From Here?
While these changes affect banks and non-banks in different ways there are discounts that still can be found.

You can compare property investment loans at our mortgage comparison pages.

If you are looking for a home loan deals for owner occupied properties go to our compare home loans page.

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October Interest Rates On Hold

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The Reserve Bank of Australia have decided to leave interest rates on hold for the 5th month in a row. The widely expected announcement to keep the cash rate at 2% is a conservative approach to see how the rate cuts earlier this year affects the economy.

We expect that lenders will therefore leave their variable interest rates unchanged as well, but will be monitoring in case of any changes outside the official rate.

To see current interest rate both variable and fixed rates please go to out mortgage comparison page.

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