The lending market for property investors continues to tighten, with another major bank announcing significant rate increases for investor home loans.
CBA has announced its standard variable rate for investor home loans will increase by 0.27 percentage points, taking the rate to 5.72 per cent.
Fixed rates for investor home loans will also increase: five-year fixed rates will rise 10 basis points to 5.04 per cent, while one- and three-year rates will climb 30 basis points to 4.94 per cent and 5.14 per cent respectively.
Two- and three-year fixed rates will experience the biggest increase as both will rise a hefty 40 basis points to 5.04 per cent. All increases will take effect from Friday 31 July.
Meanwhile, the rate on most fixed-rate owner-occupier loans has been trimmed by up to 30 basis points, taking all below the 5.0 per cent mark.
The cuts, which took effect from last Wednesday 22 July, will see one- and three-year fixed rates fall by 20 basis points to 4.64 per cent. Two-year rates will fall by 10 basis points, also to 4.64 per cent. The biggest cut is to four-year fixed rates, which will drop by 30 basis points to 4.84 per cent.
Five-year fixed rates for owner-occupiers will increase, however, climbing 20 basis points to 4.94 per cent.
“As Australia’s largest home lender, we support the prudential regulator’s actions to ensure lending practices remain sustainable and we have been actively managing our investment home loan portfolio to remain below the 10 per cent growth limit,” Matt Comyn, CBA’s group executive for retail banking services, said.
“Despite making a range of changes to our investor lending policies in the past few months, we have witnessed ongoing investor lending growth and at an industry level, investor lending approvals remain 22 per cent higher than 12 months ago.
“In the current market conditions, we believe these changes strike an appropriate balance in our portfolio between owner-occupied home loans and those seeking investment loans.”
CBA’s move comes after ANZ last week announced similar rate increases across its investor home loan products.
Smart Property Investment's sister publication, The Adviser, contacted Westpac and NAB to see if they have similar plans in the pipeline.
A spokesperson for Westpac would only say that the bank’s home loan rates are continually under review, adding that “we’ve made no secret that we will do whatever it takes to comply with APRA’s ruling on the investor lending cap”.
Similar comments were provided by a spokesperson for NAB.
“We continually review our position in the market and consider a range of factors, including regulatory obligations, regulatory capital and competitor pricing,” the spokesperson said.
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