Over the past couple of weeks, Banks have introduced lending policy changes that could have major impacts if you are looking to finance a new residential owner occupied or investment property, or refinancing an existing residential mortgage.
Some of these changes include:
Limiting interest only loans to 80% Loan Valuation Ratio’s
Applying higher interest rates to interest only lending
Ceasing rebates when refinancing interest only loans
Not accepting Interest Only repayments for Home and Investment Construction Loans once completed and the loan has fully funded.
Maximising interest only periods to 5 years
So what should you do now? If you are impacted by these changes there are several remedies that you could look at:
Firstly check what interest rate your loan is on. If it is over 4.50% your maybe paying too much.
Ask your lender for an interest rate discount. Whats the worst they can say!
If either of the first 2 points don’t succeed, work out if the budget can afford Principal and Interest loan repayments. Loan rates can be approx. 0.20% lower then interest only loans.
Refinance to an alternative, cheaper and more flexible lender.
What could happen in the immediate future? In the recent Federal Budget, levies were imposed on the Big 4 Banks and Macquarie, which in my view will be passed onto the consumer. In combination with Regulator imposed restrictions, it is likely interest only or investment loans will be paying more in rates and fees.
Do you have the the time to do all the work? If you don’t, give us a call because not only can we get you a competitive rate for investment loans, and interest only loans, we do all the work for you, and it is an absolutely free service, as we get paid by the lenders.
We look forward to hearing from you, and this can be done by clicking on the following link http://aapfb.com/contact/