Has your borrowing capacity improved?
It is true to say that since 2014 we have witnessed what some describe as a property lending credit squeeze.
APRA, the banking regulator, imposed a number of restrictions on lenders (which was passed on to borrower’s) making it more difficult primarily for those wanting to borrow to buy investment properties.
These measures included restrictions on Investment loan growth, Interest only loans and a minimum assessment rate for existing and new property debt.
Good news finally !!
For a number of reasons, both economic and political we have seen all of these restrictions be removed with the most recent being a change to the serviceability assessment rate.
ADI's (Australian deposit taking institutions) or lenders will now be able to review and set their own minimum interest rate floor for use in serviceability assessments and utilise a revised interest rate buffer of at least 2.5 per cent over the loan’s interest rate. Common industry practice has been to use a rate of 7.25 per cent.
Since this was announced last month a number of lenders have been quick to implement changes resulting in a greater level of borrowing for most borrowers.
The impact of these recent changes will vary subject to each borrower’s individual financial position but is certainly a move in the right direction.
To take advantage of these changes however, it has never been more important to ensure that property owners have the most competitive interest rates possible with their existing loans.
With recent reductions in interest rates, an increased capacity to borrow and some amazingly low variable and fixed rates there is a great deal of positivity in the market.
At the moment we are seeing a strong appetite amongst lender’s for residential borrowing and this has provided confidence for owner occupiers and investors alike.
Our savvy clients are refinancing, reducing their interest, as well as expanding their borrowing capacity to look at other property opportunities.
For a conversation about your particular situation or a complimentary review of your property loan facilities
click on the link HERE or call Wizdom Loans on 1300 949 366.