Christmas Home Loan Cut Off Times

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In a rush to get home loan and investment loan paper work processed before Christmas, lenders have set specific dates for submission.

Below I have provided a list of estimated cut off dates before the 23rd December deadline. This summary of what lenders are doing  and you should check with your lender or broker to find out specific dates from your lender

Home Loan Approvals: 5th December

First Home Buyers Grants (FHOG): 9th December

Settlements: 12th December

Drawdowns: 12th December

External Refinances: 5th December

Loan Variations: 16th December

Discharges: 28th November

After these dates there is a great possibility that your home loan requests will not be processed before Christmas. So be mindful of these dates and contact your lender or broker now to ensure that your application is not delayed.

If you have any questions about home, investment or commercial loans, please feel free to contact us.

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

If you are looking for a commercial loan or looking for a better deal please visit our commercial loans website.

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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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Variable Interest Rates Down By 0.25% – ANZ CBA NAB Westpac ING Suncorp Banks

UPDATE 2 – 7/5/13 @ 5:20 pm: Commonwealth Bank and Westpac will also reduce their variable mortgage rates by 0.25%. We will have to wait until Friday for ANZs decision. I expect St George Bank, Bank of Melbourne, Bank SA and RAMS all to follow their owner Westpac. Check below for more changes.

UPDATE 7/5/13 @ 4:01 pm: NAB, ING Direct and Bank of Queensland have all reduced their home loan variable rates by 0.25% in line with the RBA

Today the Reserve Bank of Australia announced that variable interest rates are to drop by 0.25% in an effort to stimulate the economy.

Historically, 2.75% is the lowest interest rates have been ever. As inflation remains low the RBA is looking to stimulate the housing market and retail sector.

The major banks have no excuse not to pass on the full rate cut as they posted profits recently. We will keep an eye on the major banks – ANZ, Westpac, Commonwealth Bank (CBA) and NAB to see how they react to the recent decision. Normally their actions affect how other lenders reduce their rates.

Current Bank Interest Rates Rate Cut Effective Date
Adelaide Bank/ Bendigo Bank -0.25%  May 27th
AMP -0.25  May 24th
ANZ -0.27%  May 17th
Bank of Melbourne -0.25%  May 17th
Bank of Queensland -0.25%  May 24th
BankWest -0.25%  May 20th
Citibank -0.25%  May 20th
Commonwealth Bank -0.25%  May 13th
Homeside Lending -0.25%  May 13th
ING Direct Bank -0.25%  May 17th
Member equity bank ( ME) -0.25%  May 28th
RAMS -0.25%  May 13th
NAB -0.25%  May 13th
St George Bank -0.25%  May 20th
Suncorp Bank -0.25%  May 24th
Westpac -0.25%  May 20th

 

We will keep you updated on current variable  interest rate reductions. If you have any questions regarding this announcement and how it impacts on your circumstances,  feel free to submit a mortgage quote.

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Variable Rates in Hold Fixed Rates are Falling

Yesterday the Reserve Bank of Australia announced that variable interest rates remain on hold at 3.00%.

While variable interest rates remain on hold for February, Fixed rate loans are falling. Unlike variable rates that usually move with RBA announcements fixed rate loans can move at any time.

A number of the major lenders have announced 1,2,3,4 and 5 year fixed rate reductions in the last few days and it might be a good time to secure a low fixed rate loan depending on your lending requirements.

To list a number of fixed rate loan here would be impracticable. The best way to find out which fixed rate loan suits your current lending needs and compare various lenders and rates feel free to submit a mortgage quote.

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ANZ Increase Interest Rates – Time to Refinance You Home Loan?

ANZ announced late this afternoon that they will be increasing their variable home loan mortgage rates by 0.06%.

ANZ claimed higher funding costs as a result for the increase. This will add approximately $100 a year to a $300,000 home loan.

Typically the other banks have followed when one lender increases interest rates. We will just have to wait and see what Westpac, NAB and the CBA do in the coming days.

I feel consumers are becoming increasingly impatient with the banks increasing rates and will begin to look elsewhere  to refinance their home loans.

If you would like to contact a mortgage consultant to help you find a suitable loan to either refinance or to purchase a new property please complete the form below.

Variable Rates from 6.35% and Fixed Rates Under 6.00%

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Interest Rates Remain On Hold

The Reserve Bank of Australia decided to leave interest rates on hold today. So there will be no relief for business borrowers and home loan borrowers for the month of April.

They have left open the door for future interest cuts for up coming months but business, especially retail are calling for them to be cut sooner rather than later.

Even though interest rates remain on hold maybe it is time for you compare your current rate to other offers on the market. Below are just a few examples of variable and fixed rates you can get today;

Variable Rate: 6.35%

2 year Fixed Rate: 5.95%

3 Year Fixed Rate: 5.95%

5 Year Fixed Rate: 6.45%

If you need help we have a mortgage broker in your area to help you find a competitive interest rate for refinance or purchasing a new home by simply completing the contact form below.

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