How Will the Changes to Investment Lending Impact Me?

September 4, 2015 - Posted in Investing, Investment Loans

When it comes to saving your pennies and diversifying your wealth, property has always been a smart option. From apartments in the city to family-style homes, an extra piece of real estate can be a great little nest egg for you and your family. After all, that’s why they call it an investment property.

Whether you’re already actively involved in the property market or looking to take the plunge, you’ve probably heard about the recent changes to investment lending in Australia. Historically, Investment loans have helped everyday investors enter the property market, but recent rule changes have seen the banks scale back on their loans to investors. With the big banks showing many customers the door, the question must be asked; is investing in property still a viable option, or should we start looking for somewhere else to nurture that nest egg?

Big Banks Forced to Freeze Lending

Let’s start by understanding the situation. For some time now, investing in property has been popular and as a result, so has lending. Investment lending has grown by around 21% in the last year alone, making APRA – Australia’s banking regulation body – nervous. APRA didn’t like the look of these figures, or the long-term effects they could render to the property market. APRA have since capped investment lending growth at 10% for all Australian Approved Deposit Institutions. Consequently, the Big Banks froze their lending by making it harder for everyday investors to secure a property investment loan.

Can We Beat the Banks

Walk into a bank today and you’ll find an investment loan a lot harder to obtain. Increased minimum deposits (up to 20%) and a reduced amount of loans on offer are just two obstacles you might face, but as always there is another option. Walk past the banks and in the doors of your local mortgage broker. They combine independent advice with extensive research to get the best results for you. Mortgage brokers aren’t hamstrung by the same restrictions as the big banks, so there’s never been a better time to invest in their advice.

The Mortgage Broker Solution

With the help of a mortgage broker, you can secure your wealth, diversify your assets and get the keys to the door of an investment property. A friendly mortgage expert can not only find a way around the 10% cap imposed by APRA, they will find a loan that suits your needs too. You won’t just get any investment loan through a mortgage broker, you’ll get the one that’s right for you, helping you to maximise your wealth even further.

So when you’re looking at the new rules for investment lending and trying to break into the property market, ask yourself the following questions:

  • Do I want the cheapest rates without having to do the legwork?
  • Do I want flexible terms to suit my financial situation?
  • Do I want maximum return from my investment property?
  • Do I want to be shown the door by a big bank, or do I want a team who can work within the APRA guidelines?

Once you’ve answered those easy questions, take the next step to make property investment even easier. If you’re exploring the property market in Brisbane or around Queensland, contact the expert mortgage brokers at Multi-Choice Home Loans. With a lending panel of over 25 principal banks and other financial institutions, they can maximise your loan, leverage tax to your advantage and can even secure a deposit without cash savings. Get in touch with their professional brokers to find out how.