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Will Changes to Investor Lending Affect Me?

By admin | 10 Sep 2015

If you’re thinking about buying your first investment property you might have heard about the changes to investor lending. Buying an investment property is a great way to grow your wealth and diversify your assets but recent changes to investor lending have left people feeling unsure.

Investment loans are loans that you are given to help you purchase a property and start growing your wealth. It used to be easier to secure an investment loan but recent rule changes have seen banks cut back on their lending to investors. So what do these changes mean for you and is it still a good idea to invest in property?

Changes to Investment Lending

Lending to investors has been the flavour of the month for quite a while now, with investor lending increasing by more than 20% in the last year. With investors collecting all the houses and property markets thriving around the country the Australian banking regular, APRA, saw a problem. APRA decided these figures were increasing to unsustainable levels and so they set new limits on lenders, putting a 10% cap on the growth in investment lending for Australia’s Approved Deposit Institutions (ADI’s).

This has put the brakes on the big banks’ lending frenzy, making it harder for the everyday investor to enter the property investment market.

So What Do I Do Now?

The big banks have made it harder to get an investment loan by raising the minimum deposit required and increasing interest rates thus decreasing the amount of investment lending they offer. Luckily, big banks aren’t the only way to secure an investment loan. By securing an investment loan through a mortgage broker you can get into the market faster.

The Mortgage Broker Difference

Going through a mortgage broker to secure your investment loan has always been a great option, and with these new restrictions on the big banks, it has become even better. Mortgage brokers can get around that 10% cap in a variety of ways, helping you to secure your investment property. Some of the ways a mortgage broker can help you with your investment loan include:

  • Finding the cheapest rates by evaluating multiple lenders
  • Ensuring that you find a lender that will still lend 95% of the value of the property
  • Teaching you the tricks and tips for maximizing your benefits while working within the APRA guidelines

Achieve financial growth through investment properties today! If you’re looking to invest in Adelaide call the team at AAA Mortgage Solutions. At AAA Mortgage Solutions we have an extensive panel of more than 30 bank and non bank lenders. We can negotiate with lenders that will still offer a 95 per cent lend of the investment property purchase price, helping you to break into the investment market sooner.

Beat the big banks and break through the tighter lending market. Contact the team at AAA Mortgage Solutions or call us on 08 8182 5555 today!

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