Forums / Getting Technical / Finance / APRA imposing controls on "investors only"

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  • Profile photo of DeanCollinsDeanCollins
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    @deancollins
    Join Date: 2015
    Post Count: 376

    What right does APRA have to enrich “owner occupiers” only.

    Do they even have the ability in their charter to implement this?

    http://www.news.com.au/finance/business/nations-biggest-banks-scales-back-on-investment-loans/story-fnkjidjt-1227355548183?from=public_rss

    Surely there is a class action here against APRA singling out investors only to implement their “currency controls”

    Profile photo of crjcrj
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    @crj
    Join Date: 2004
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    There are other ways that it could be dealt with eg making banks change their risk ratings on investment loans. The problem with these other methods is that you can have a credit squeeze which will affect sound operators too.

    Back in the 80s and early 90s the banks did charge a higher rate on investment loans than on owner occupied housing.

    Profile photo of karmarkkarmark
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    @karmark
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    i head some lenders are tightening their lending criteria’s for all loans. is that true?

    Profile photo of Corey BattCorey Batt
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    @cjaysa
    Join Date: 2012
    Post Count: 1,010

    APRA has been applying a lot of pressure to a number of banks over the last few weeks which have indeed meant that the serviceability models have been tightened. A key example of this is with AMP – whose niche policy set have been wiped out over night. It appears this will be following through with quite a few other lenders, as APRA attempts to cool down the growth of investment debt.

    As always, evolve with the new challenges we face!

    Corey Batt | Precision Funding
    http://www.precisionfunding.com.au
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    Investment Focused Finance Strategist - servicing Australia-wide

    Profile photo of Richard TaylorRichard Taylor
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    @qlds007
    Join Date: 2003
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    I must admit we have been inundated over the last week or so with enquiries from investors whose own lenders are knocking them back on serviceability.

    Half the job of a good broker is to focus on the clients end strategy and figure out a map to get there.

    Those borrowers who focus solely on interest rate are now paying the price with the discount lenders declining investor deals left right and centre.

    APRA hasn’t started yet and has so many more restrictions it can impose on lenders. This is merely round 1.

    Cheers

    Yours in Finance

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
    http://www.mortgagecapitalaustralia.com.au
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    0-40 Properties in a decade with a unencumbered portfolio value in excess of $40M. Ask me for a copy of my API Interview.

    Profile photo of Harry GoyalHarry Goyal
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    @loansdirect
    Join Date: 2015
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    Yes, ANZ, Westpac and Commonwealth Bank have made the changes to their loan criteria.

    ANZ has confirmed it will no longer offer discretionary pricing to investor only loans or offer a switching discretion to investors.
    Westpac has removed its negative gearing benefit.
    CBA has put a halt to “pricing discounts for investment home loans.

    Harry Goyal | Loans Direct
    http://www.loansdirect.com.au/
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    Profile photo of Richard TaylorRichard Taylor
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    @qlds007
    Join Date: 2003
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    Been a few more changes since then Harry as Jamie and I have mentioned in the other post.

    Cheers

    Yours in Finance

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
    http://www.mortgagecapitalaustralia.com.au
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    0-40 Properties in a decade with a unencumbered portfolio value in excess of $40M. Ask me for a copy of my API Interview.

    Profile photo of PLCPLC
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    @plc
    Join Date: 2012
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    Interesting. ANZ and NAB have said that they are no longer offering discretionary pricing, but CBA and Westpac have “reduced” their investor discounts which seems to suggest they are still offering them in some format.

    I just had extra discount approved for a Westpac investor deal, albeit being to renew a pricing discretion that had expired a month back.

    I wonder if other brokers have tried with Westpac and/or CBA and had luck?

    Cheers

    Tom

    PLC | Phoenix Loan Consulting
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    Melbourne based Mortgage Broker | Making Finance Simple

    Profile photo of Jason StaggersJason Staggers
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    @deancollins, as I’ve written here, APRA exists to regulate our banks’ exposure to risk in order to protect depositors, so all they need to do is say that’s what they’re doing even if what they are really doing is carrying out monetary policy for the government. None of this would be necessary if the RBA wasn’t artificially suppressing interest rates below what the market would otherwise set on its own.

    Jason Staggers | PropertyInvesting.com
    http://propertyinvesting.com
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    Profile photo of Jason StaggersJason Staggers
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    @jason_staggers
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    To all of our mortgage brokers in the forum, thanks for your first-hand updates. It’s very helpful for the broader PI.com community.

    Jason Staggers | PropertyInvesting.com
    http://propertyinvesting.com
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    Profile photo of Jamie MooreJamie Moore
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    No worries :-)

    Macquarie’s changes have now been announced. They’re no longer a generous lender when it comes to calculating max borrowing :-(

    They’re also capping owner occ loans that are set up as interest only at 80%

    Cheers

    Jamie

    Jamie Moore | Pass Go Home Loans Pty Ltd
    http://www.passgo.com.au
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    Mortgage Broker assisting clients Australia wide Email: [email protected]

    Profile photo of Corey BattCorey Batt
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    @cjaysa
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    Some very large fundamental shifts in the policies of the lenders at this time – spending a lot of time with clients at the moment reviewing their situations so we can ensure we will meet their goals moving forward. Pre-approvals with a number of lenders aren’t being honoured with their new policies in place, which will make for awkward times for some investors.

    I’d stress the importance to anyone here to show some prudent planning with their financial strategies at this time, otherwise some very simple costly mistakes will slow you down on your property journeys!

    Corey Batt | Precision Funding
    http://www.precisionfunding.com.au
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    Investment Focused Finance Strategist - servicing Australia-wide

    Profile photo of Richard TaylorRichard Taylor
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    @qlds007
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    Corey is correct about pre-approvals.

    I had 2 forum clients ring me on Friday to ask me how they would go with their OTP purchases which were supposed to be complete by the end of this year. Regretfully had to tell them as it stood they would not qualify.

    I am sure there will be many more clients in the same boat.

    Going forward all investors are going to need some careful planning and professional advice to ensure they don’t run out of stream on their investing journey.

    Cheers

    Yours in Finance

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
    http://www.mortgagecapitalaustralia.com.au
    Email Me | Phone Me

    0-40 Properties in a decade with a unencumbered portfolio value in excess of $40M. Ask me for a copy of my API Interview.

    Profile photo of Jamie MooreJamie Moore
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    Join Date: 2010
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    Nab and Advantedge have announced their changes today.

    On the surface – they don’t seem as drastic as changes implemented by other banks such as AMP and Macquarie.

    They’re applying a “loading” to debt held with other lenders rather than assigning an assessment rate of 7% + on P&I terms.

    Cheers

    Jamie

    Jamie Moore | Pass Go Home Loans Pty Ltd
    http://www.passgo.com.au
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    Mortgage Broker assisting clients Australia wide Email: [email protected]

    Profile photo of Corey BattCorey Batt
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    Nab and Advantedge have announced their changes today.

    On the surface – they don’t seem as drastic as changes implemented by other banks such as AMP and Macquarie.

    They’re applying a “loading” to debt held with other lenders rather than assigning an assessment rate of 7% + on P&I terms.

    Cheers

    Jamie

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    Their calculations based on todays announcement should still make them a competitive player, however their slight adjustments to investor vs owner occupier interest rates isn’t that thrilling.

    Corey Batt | Precision Funding
    http://www.precisionfunding.com.au
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    Investment Focused Finance Strategist - servicing Australia-wide

    Profile photo of DeanCollinsDeanCollins
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    @deancollins
    Join Date: 2015
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    Corey is correct about pre-approvals.

    I had 2 forum clients ring me on Friday to ask me how they would go with their OTP purchases which were supposed to be complete by the end of this year. Regretfully had to tell them as it stood they would not qualify.

    I am sure there will be many more clients in the same boat.

    So is this going to be enough to take the steam out of the Sydney market?

    Based on this weekends auctions I’d say not but as I’m just about to buy next IP …would prefer not to be buying he month before everyone decides yeh we are over paying….

    Profile photo of Don NicolussiDon Nicolussi
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    @don
    Join Date: 2005
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    A few of the smaller lenders are moving to fill these gaps with the odd lender increasing LVR on investment loans. However, agreed that overall the changes are significant for certain investors with specific gearing requirements.

    Don Nicolussi | Mortgage Broker - Home Loan Warehouse
    http://homeloanwarehouse.com.au
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    "I think of finance as a technology, a way of getting things done." Robert Shiller

    Profile photo of Corey BattCorey Batt
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    @cjaysa
    Join Date: 2012
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    Corey is correct about pre-approvals.

    I had 2 forum clients ring me on Friday to ask me how they would go with their OTP purchases which were supposed to be complete by the end of this year. Regretfully had to tell them as it stood they would not qualify.

    I am sure there will be many more clients in the same boat.

    So is this going to be enough to take the steam out of the Sydney market?

    Based on this weekends auctions I’d say not but as I’m just about to buy next IP …would prefer not to be buying he month before everyone decides yeh we are over paying….

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    I’ve been of the mind that Sydney has already hit it’s effective peak – considering we’re hitting equilibrium in the ‘further boom’ vs ‘property bubble’ talk in the media, industry related commentary etc. We may see a further spike in the meantime, but it wouldn’t be surprising to see a minor correction over the forward period.

    APRA’s fiddling will only play further into this – if the data shows a slow down in lending growth we may be saved from further intervention.

    Meanwhile other healthy markets are getting hit from the excesses of NSW – we may see further localised policy such as ING’s just released (max 80% LVR for NSW properties).

    Corey Batt | Precision Funding
    http://www.precisionfunding.com.au
    Email Me | Phone Me

    Investment Focused Finance Strategist - servicing Australia-wide

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