Home Loan Market Update – July 2017
Quick Summary
Lenders are continuing to target property investment in order to comply with the Australian Prudential Regulatory Authority (APRA) and the Australian Securities and Investments Commission (ASIC) directives announced in April. This is especially true in the east coast capitals of Sydney, Melbourne and Brisbane.
Property market update
APRA and ASIC are trying to manage the growth in property prices as well as add some resilience to the property market. They are doing this by trying to reduce the number of Investors in the market as well as their effect.
This is done largely by reducing investors’ capacity to borrow.
Lenders have chosen to implement these directives by continuing to increase the interest rates on Interest Only and Investment loan products which are the ones most favoured by Investors.
They are hoping that by making these products less attractive, they will push more Borrowers – both Home Owners and Investors to more traditional Principal and Interest payments.
The table bellow will give you an overview of the changes in the market over the last 30 or so days. We will be updating this table on a regular basis as lenders update their rates throughout the month of July.
| Bank | Products Affected | Change | Effective Date |
|---|---|---|---|
| CBA | SVR Owner Occupied Home Loans – Principal & Interest | -0.03% | 7-Jul-2017 |
| CBA | SVR Owner Occupied Home Loans – Interest Only | +0.30% | 7-Jul-2017 |
| CBA | SVR Investment Home Loans – Principal and Interest | – | 7-Jul-2017 |
| CBA | SVR Investment Home Loans – Interest Only | +0.30% | 7-Jul-2017 |
| St George | Owner Occupied Home Loans – Principal & Interest | -0.08% | 30-Jun-2017 |
| St George | Owner Occupied Home Loans – Interest Only | +0.35% | 30-Jun-2017 |
| St George | Investment Home Loans – Principal and Interest | – | 30-Jun-2017 |
| St George | Investment Home Loans – Interest Only | +0.34% | 30-Jun-2017 |
| NAB | Owner Occupied Home Loans – Principal and Interest | -0.08% | 30-Jun-2017 |
| NAB | Owner Occupied Home Loans – Interest Only | +0.35% | 30-Jun-2017 |
| NAB | Investment Home Loans – Principal and Interest | – | 30-Jun-2017 |
| NAB | Investment Home Loans – Interest Only | +0.35% | 30-Jun-2017 |
| ANZ | Owner Occupied Home Loans – Principal and Interest | -0.05% | 16-Jun-2017 |
| ANZ | Owner Occupied Home Loans – Interest Only | +0.30% | 16-Jun-2017 |
| ANZ | Investment Home Loans – Principal and Interest | -0.05% | 16-Jun-2017 |
| ANZ | Investment Home Loans – Interest Only | +0.30% | 16-Jun-2017 |
| Westpac | Owner Occupied Home Loans – Principal and Interest | -0.08% | 30-Jun-2017 |
| Westpac | Owner Occupied Home Loans – Interest Only | +0.34% | 30-Jun-2017 |
| Westpac | Investment Home Loans – Principal and Interest | – | 30-Jun-2017 |
| Westpac | Investment Home Loans – Interest Only | +0.34% | 30-Jun-2017 |
| AMP | Owner Occupied – Principal and Interest & Interest Only | – | 26-Jun-2017 |
| AMP | Investment – Principal and Interest & Interest Only | +0.35% | 26-Jun-2017 |
| ING | Owner Occupied – Interest Only | +0.15% | 23-Jun-2017 |
| ING | Owner Occupied – Interest Only | +0.20% | 7-Jul-2017 |
| ING | Owner Occupied – Principal and Interest (Orange Advantage) | -0.05% | 7-Jul-2017 |
| ING | Investment – Principal and Interest | – | 7-Jul-2017 |
| ING | Investment – Interest Only | +0.35% | 7-Jul-2017 |
Table last updated Wed. 5-Jul-2017
What You Need To Do
As per our advice from April, if you’re using an Interest Only Home or Investment Loan, you need to:
- Speak with your Accountant – Check with your Accountant first to see if you are better off staying with your current Interest Only loan or switching to a Principal and Interest loan at a lower rate. While you can save on the interest paid by switching to a P&I loan on a lower rate, there maybe unintended tax implications. Best to seek professional advice first.
- Speak with your Mortgage Broker – If your Accountant advises that you are better off on a P&I loan, contact your Mortgage Broker / Loans Advisor. They should be able to help you identify the loan product that best suits your current needs.
- Review your loan – Contact your Mortgage Broker / Loans Advisor in order to organise a loan review. There maybe newer products on the market that are more suited to your current needs.
Remember, Interest Rate is important but it’s not the only factor when choosing a Lender.
The product, facility and bank policies all have to be able to help you achieve your financial goals. Every Lender has their pros and cons and everyone’s situation is different. What works for one Borrower, may not work for another.
