The prudential regulator has shaken the branches when it comes to investment lending in fact I haven’t seen this level of lender reaction since the GFC and maybe not even then. Let’s look at the results so far lender by lender on investment lending only:
- AMP have withdrawn completely from investment lending
- ANZ increased rates on new and existing loans reduced LVR 90%
- CBA increased assessment and interest rates on new and existing loans including fixed rate loans while tightening servicing
- Heritage max lending 80% LVR
- ING increase all interest rates reduced max 80% LVR and tightened servicing
- Macquarie increased rates on new and existing loans
- NAB increased rates on new and existing loans
- Suncorp something but too obscure to figure out what
- Westpac reduced discounts and tightened servicing
As for the other lenders on panel – well nothing much has changed. We can still get 95% investment loans on interest only and we can get interest rates as low as 4.04% variable and 4.29% fixed so the question is; how long can this situation last and how much damage will be done to the lenders above?
Initial response from clients has been anger. If the situation persists I can see some second tier lenders doing very, very nicely out of this.