1 March 2016
Portfolio Capital - Mortgage Market Wrap
by David Harris, Portfolio Capital Pty Ltd
Late last year I talked about the changing nature of the
mortgage market, particularly in respect to changes brought about
by the Australian Prudential Regulation Authority (APRA).
Well, the market is still constantly changing, however, we are
seeing a few lenders loosen up on investment lending ratios and
implementing some reductions in investment lending rates.
We are also seeing the creation of some very innovative lending
products - some of which few consumers are aware of and are
unlikely to come across themselves. This is where working
with an up to date, licenced mortgage broker can often help to
maximise returns on your investment properties.
For example, while investment lending rates can be significantly
higher than lending for owner occupied properties there are some
lenders providing owner occupied rates for investment properties if
your borrowings for both properties are with them. Even more
innovative is a recently announced offering by an award winning
Purchase or refinance your owner occupied and investment
property through them and you'll get a rate of 2.5% (that's not a
typo), Comparison Rate *2.55%, on the home loan as long
as the value of the investment loan is equal to or greater than
home loan. Sure, the Investment loan is dearer at 5.5%,
comparison rate *5.54%, but the combined rate at a
fifty/fifty split is still only 4.07%. Not only that but the
higher investment rate is the one with the tax deductibility.
I hasten to add that this product may not be suitable for
everyone. Long-term plans need to be considered carefully to
ensure that the potential benefits are achievable and regular
annual or bi-annual reviews would be important. However, it
does demonstrate some of the innovation going on outside of the
'Big 4', innovation that provides significant opportunities for
It is this type of competitive and changing market that brings
mortgage and finance brokers into their own. With the broker
share of the mortgage market tipped to exceed 60% this year (The
Advisor, 23 Feb 2016) brokers represent a strong force for
innovation and change and are powerful advocates for consumers -
Want to review your loans and see if we can save you? Give
us a call, send an email or visit us online. We'll give you
reliable, honest advice on your borrowing options - and we don't
charge a fee for this service.
|Phone: 07 31391372 | Web: www.portfoliocapital.com.au
*The comparison rate is based on a loan of $150,000
over 25 years. Different amounts and terms will result in different
comparison rates. Costs such as redraw fees or early repayment
fees, and cost savings such as fee waivers, are not included in the
comparison rate but may influence the cost of the loan.
The contents of this article are of a general nature only.
They should not be construed as financial or other advice as
individual circumstances have not been considered.