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Why is Finance is constantly at flux ?

Finance - State of Flux

What is going on with finance? It seems there is a story in the media everyday with another bank tightening lending policy.

Rate increases

It all started about 18 months ago when APRA, the banking regulator, imposed its first initiative by restricting investment loan growth to 10% and instructing "The Majors" to increase their capital holdings for the loans.

The increased capital holdings raised lender costs resulting in the first out of cycle rate rises for investment loans, but increases were not uniform, investment loans can be found around historical lows of about 4%, while others are mid to high 4%'s.

Andrew's Commentary:  Check your interest rates and if your rate is mid 4% or higher, click here to give me a call.

Tighten Loan Serviceability

Because most lenders were exceeding the loan growth ceiling banks tighten serviceability resulting in lower borrowings for the same income. Serviceability tightening has been progressive but again, some lenders will still lend more than others.  

Over the past few days, CBA, BankWest and AMP, fearful of exceeding the growth limit, announced they are suspending investment loan refinancing from other lenders.

But while most lenders have substantially tightened policy, it has opened the door for other lenders to fill the vacuum by expanding their offering.

Andrew's commentary: If you need finance and have been struggling with serviceability, Investor Edge Finance can help you scan the market to find a finance solution for you.

 Property Wrap

Melbourne's auction market has delivered another very solid 81 per cent clearance rate last weekend as the market starts to get into full swing.

There were 444 auctions in Melbourne, with 361 selling and 83 being passed in, 30 of those on a vendor bid. In addition to the auctions, there were also an additional 329 private sales.

Last Tuesday, as expected, the RBA left rates on hold for the fifth consecutive month, at the record low 1.5 per cent. For buyers, this brings a great opportunity to step into or step up in the Melbourne property market.

Next weekend buyers will have far more choice with an expected 900 auctions scheduled, double what we have seen in the past couple of weeks.

So, if you are in the market for your next property, Contact Us  and we will determine your maximum purchase price and arrange your pre-approval so you can get amongst it.