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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.

Westpac has introduced a new pricing model for Property Investors

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.

Example:

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.

ANZ has introduced some SWEEPING changes to both Investment and Home Buyer criteria

  1. No more spreading of equity across multiple security to reach an overall LVR of 70% for investment in Auckland
  2. Investment Lending for sections and off the plan apartments has stopped
  3. Investment Lending on land build, turnkey with delayed settlement is no longer available
  4. New build lending for Home Buyers (which is exempt from LVR restrictions) is no longer available at 95% but reduced to a maximum of 90%

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.