However, the banks are moving rather quickly with changes and it would be remiss of us not to release some current Market Update information now.
The bank (all banks) work on a 2-tier pricing model – ‘Rate Card’ standard pricing and ‘Special’ pricing.
Special pricing was available for all clients with more than 20% equity BUT this has now been removed. Westpac will only reduce the Rate Card by as much as 0.50%. If the Special is more than 0.50% less than the Rate Card, the investor borrower will pay the higher rate.
Variable Rate 5.75% - an Investor will pay no less than 5.25%
2-year rate card is 4.75% - the Special 2-year rate is 4.19% - BUT an investor will pay no less than 4.25%
If you are on a variable rate
Now may be the time to fix, it could be a last chance to fix at ANY bank before margins come in across the board.
When you do fix, remember Interest Rate Averaging – don’t have ALL your loans expiring at the same time! I would suggest those on fixed rates become aware that when they expire, the rate margins would be in place.
To explain point 1:
If you have existing rentals or a home with ANZ and you need to access the equity to purchase at 70% on an investment, you will no longer be able to do this.
You must be able to present the 30% deposit for the purchase via other means than an application to release the deposit at the same time.
IF you are seeking to top up against a home or rental now, for the purpose of it being a deposit, this would be subject to a Purchase agreement. And when you purchase, it will be declined as it no longer meets criteria.