Lenders continued to wind back investor mortgage rate premiums in January. AMP Bank, Bendigo Bank, ING, IMB and Suncorp were among those that cut rates on investor and interest-only loans last month.
This follows similar moves in December, when Beyond Bank, Virgin Money and Westpac cut some investor and interest-only rates.
In March last year, the Australian Prudential Regulation Authority told lenders to limit new interest-only lending to 30 per cent of loan approvals. It had previously told lenders to limit the growth of loans to residential property investors to 10 per cent a year and to apply stricter serviceability criteria when assessing loan applications.
APRA’s rules have had the desired impact. The latest Reserve Bank lending figures show that investor mortgage balances grew by 6.1 per cent over the 12 months to the end of December, the lowest annual rate of growth in investor lending since 2016.
And APRA figures show that in the September quarter last year, interest-only loans accounted for 16.9 per cent of total new mortgage lending – down from 37 per cent of the total a year earlier.
The proportion of loans with high loan-to-valuation ratios (above 90 per cent) fell from 8.1 per cent to 6.8 per cent over the same period.
Lenders have met APRA’s requirements and now they easing their rates on investor and interest-only loans.
According to the latest Mozo Banking Roundup, AMP Bank cut its principal and interest investor rate by 56 basis points to 4.38 per cent and its interest-only investor rate by 31 basis points to 4.68 per cent. At the same time it cut its P&I owner-occupier rate by 20 bps to 3.59 per cent and increased its interest-only owner-occupier rate by 30 bps.
Bendigo Bank cut its P&I investor rate by 20 bps to 4.81 per cent and interest-only investor rate by 40 bps to 5.36 per cent. The bank left its P&I owner-occupier rate unchanged and increased its interest-only owner-occupier rate by 10 bps.
ING cut P&I investor rates by up to 25 bps, depending on the loan amount, and its P&I owner-occupier rates by up to 11 bps.
IMB cut a range of P&I and interest-only rates by 30 to 50 bps.
Suncorp dropped the rates on its basic and package investor loan by 10 bps and 30 bps respectively.
The rate leader in the mortgage market is Reduce Home Loans, which is offering a variable rate of 3.39 per cent on its owner-occupier Rate Buster loan.
The best fixed rate on offer is Greater Bank’s one-year offer of 3.49 per cent. IMB is offering 3.65 for two years, Move and SCU 3.69 per cent for three years.
Greater Bank, Newcastle Permanent and Suncorp are offering 3.99 per cent for five years.
Among the big banks, ANZ of offering a variable rate of 4.3 per cent for owner-occupiers (where the loan is over $500,000 and the LVR below 80 per cent), Commonwealth Bank is offering 4.52 per cent, National Australia bank 4.34 per cent and Westpac 4.34 per cent.
